The Russian economy inches forward: Will that suffice to turn the tide?

 

Although the recession continued in Russia throughout 2016, the pace of GDP decline has slowed down. The Russian government continued its adjustment to low oil prices and the effects of sanctions that were imposed in 2014. These measures include the introduction of flexible exchange rates, cuts in public spending and use of the federal reserves. As a part of ongoing cooperation with the World Bank, CEPS hosted a lunchtime meeting on January 16th, entitled “The Russian economy inches forward: Will that suffice to turn the tide?” The World Bank’s Lead Economist for the Russian Federation, Apurva Sanghi, shared the main findings of the biannual Russia Economic Report, which synthesises recent trends in key economic indicators, presents the Bank’s economic outlook for Russia for 2016-18 and analyses strategic policy issues. In 2016, the economy had a negative growth 0.6%, and is expected to grow by 1.5% in 2017 and 1.7% in 2018, as the World Bank predicts that oil prices will continue to rise. Thus, from a macroeconomic point of view, the Russian economy has been well-managed. At the same time, however, it faces serious challenges as the share of its vulnerable population has increased by 8%.