As economic sanctions and weak investment take their toll on the Russian economy, the growth of the country’s GDP this year is expected to slow to 1 percent from 1.2 percent projected in June, the World Bank said on Wednesday, according to Reuters.
This is the fourth time this year that the Washington-based global financial institution has revised its forecast for Russia downwards.
“Growth in Russia is projected to decelerate to 1.0 percent in 2019, down from a six-year high of 2.3 percent in 2018. The slowdown stems from multiple factors, which are compounded by the continuation of international economic sanctions,” the World Bank said in its latest Europe and Central Asia Economic Update. “The slowdown stems from multiple factors, which are compounded by the continuation of international economic sanctions.”
“Weaker-than-expected growth in Russia could potentially spill over to Central Europe, Eastern Europe, and the South Caucasus, all of which maintain close trade and financial linkages with it,” the document reads.
The World Bank, in a report on Europe and Central Asia, also said it has lowered Russia’s 2020 GDP growth forecast to 1.7% from 1.8% predicted earlier.
“Growth in the emerging and developing countries of Europe and Central Asia is expected to slow to 1.8 percent in 2019 (down from 3.2 percent in 2018), a four-year low. However, aggregate growth figures mask the diversity of performance across the region,” the World Bank said. “Regional growth was hindered by marked weakness in Turkey, which suffered from substantial financial market stress, as well as sluggish activity in the Russian Federation amid oil production cuts. But there was robust growth in other parts of the region, such as Central Europe and Central Asia, as well as the South Caucasus.”