The World Bank has again improved its forecast for Russia’s GDP in 2023

The Russian economy will grow by 1.6% by the end of 2023, the report says. report World Bank (WB) on developing economies of Europe and Central Asia. Previously, World Bank experts predicted a contraction of Russian GDP by 0.2%.

“Growth is forecast at 1.6% in 2023. Fiscal stimulus supported consumer demand and defense spending, while the energy sector contracted less than expected,” the report said.

The forecast turned out to be significantly higher than that announced in the April issue of this report. Then WB expected reduction in Russia’s GDP by 0.2%, later the same estimate was given and in the June World Bank report on global economic prospects. At the beginning of the year, the international organization predicted a decline of 3.3%.

At the same time, the World Bank calls the prospects for medium-term growth vague due to restrictions on Russia’s access to world markets, qualified personnel and technologies. Analysts also note a shrinking current account surplus and tightening fiscal space. Economic growth is forecast to slow to 1.3% in 2024 and 0.9% in 2025 amid capacity constraints and slowing consumer demand.

Annual inflation in 2023 is expected to be 5.6%, while price growth will accelerate by the end of the year due to the weakening of the ruble, according to the World Bank.

The economic growth forecast for developing countries in the region has also been revised upward: the World Bank now expects GDP to increase by 2.4% in 2023 instead of the 1.4% previously announced.

The day before, October 4, the United Nations Conference on Trade and Development (UNCTAD) presented its report on trade and development, which forecasts the Russian economy to grow by 2.2% in 2023. Global economic growth, analysts believe, will slow down from 3% in 2022 to 2.4% at the end of the current year, and some or there are no signs of improved dynamics in 2024 yet.

Previously, Russian Finance Minister Anton Siluanov statedthat over the next three years the Russian economy will grow at a rate above 2% per year. Siluanov noted that budget policy is being implemented based on “fairly favorable” macroeconomic conditions. At the same time, we need to be prepared for different scenarios, he added. The minister pointed to “economic and financial fragmentation, structural imbalance” and sanctions that Western countries continue to impose on the Russian Federation.

On September 22, during a government meeting, Minister of Economic Development Maxim Reshetnikov said that Russian GDP growth in 2023 will be 2.8%, in 2024 – 2.3%. Going forward, the growth forecast is just over 2% per year. At the end of August, Siluanov assumed that the Russian economy would grow by 2.5% or more at the end of the current year.