Russia Economic Report, No. 41, June 2019 : Modest Growth - Focus on Informality
Real GDP growth in Russia surpassed expectations in 2018, reaching 2.3 percent, mostly due to one off effects of energy construction. Forecasted growth of 1.2 percent in 2019 and 1.8 percent in 2020 and 2021 reflects a more modest outlook. Russia’s...
| Main Author: | |
|---|---|
| Format: | Report |
| Language: | English |
| Published: |
World Bank, Washington, DC
2019
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/332081560895493011/Russia-Economic-Report-Modest-Growth-Focus-on-Informality http://hdl.handle.net/10986/31933 |
| Summary: | Real GDP growth in Russia surpassed
expectations in 2018, reaching 2.3 percent, mostly due to
one off effects of energy construction. Forecasted growth of
1.2 percent in 2019 and 1.8 percent in 2020 and 2021
reflects a more modest outlook. Russia’s macro-fiscal
buffers remain strong, with fiscal surpluses across all
tiers of government and low public-debt levels. When
compared to advanced economies, Russia spends less on health
and education. Rebalancing in favor of these categories
could improve the overall efficiency of public spending.
Short-term inflationary risks have abated, with the Bank of
Russia signaling a return to a neutral policy rate. Lending
activity is recovering, but the banking sector remains
afflicted with high concentration and state dominance.
Having eased slightly, the poverty rate remains in double
digits with many households close to the poverty line and
lacking formal employment. Informal employment is rising in
the face of close-to-zero net job creation by medium-sized
and large formal enterprises. Key risks to medium-term
growth include the expansion of economic sanctions, renewed
financial turmoil in EMDEs, a dramatic drop in oil prices,
and souring of the global trade environment. The recent
double-digit expansion in household credit may also pose a
risk to financial stability in the case of a deterioration
in the macroeconomic environment. |
|---|