The World Bank upgraded its outlook for Russian GDP in this year and it is expected to drop by 4.5% in this year and by 3.6% in 2023, the institution said in its report on European and Central Asian countries, Trend reports citing TASS.
The World Bank therefore improved its outlook by 4.4 percentage points for this year and downgraded it by 1.6 percentage points for 2023. "The Russian economy is expected to contract by 4.5% in 2022, as falling real wages erode consumption, while sanctions and voluntary withdrawals by foreign businesses and intense uncertainty weigh on investment," the institution said. "Having declined in the initial post-pandemic recovery, poverty is expected to return to near-2020 levels over the forecast horizon," World Bank experts noted.
"In 2023, given the context of continued war and proliferating sanctions, Russia’s economy is expected to decline again, by 3.6%, as earlier delays in EU oil embargos are fully implemented and all drivers of growth weaken. Although emergency policies forestalled economic collapse, the effects of sanctions are expected to compound over time," the World Bank said.
The outlook beyond the year of 2023 "is exceptionally uncertain," World Bank experts noted. "Russia’s economy may stabilize somewhat, although at a much lower base of activity, and likely still with stagnant investment. Growth in 2024 is forecast at 1.6%, largely due to modest consumption growth and a marginal recovery in exports, as Russia’s trading relationships start to reorient," the institution added.