World Bank Gives Positive Forecast to Russian GDP

The World Bank consolidated its faith in the Russian economy. The WB experts predicted a 3.2-percent growth for the Russian GDP in November 2009. Now specialists of this global financial organization forecast the growth of Russia’s Gross Domestic Product on the level of 5-5.5 percent. The growth of the world economy is predicted on the level of 2.7 percent this year.

The WB experts said the growth of the Russian GDP would surpass the growth of the global economy in 2010 and in 2011. Russia’s Gross Domestic Product will grow by 3.5 percent in 2011, whereas the growth of the world economy is expected to reach 3.2 percent. The economies of developing states will be developing most dynamically during the forthcoming two years. The growth of the “third world” GDP is to reach the level of 5.2 percent in 2010 and 5.8 in 2011.

It is worthy of note that the WB’s previous forecast for the Russian economy coincides with the official forecast made by the Russian government. Russia’s Finance Ministry predicted the growth of the nation’s GDP on the level of 3-3.5 percent.

It is an open secret that the Russian economy directly depends on prices on oil and gas. The WB economists suppose in their report that oil prices will stay on their current level. A barrel of Urals oil will cost $76 in 2010 and $76.6 in 2011.

It just so happens that specialists of the World Bank saw a previously unseen potential in the Russian economy. The experts made their conclusion on the base of the strengthening of the Russian ruble. They said that the ruble rate will continue to grow in the near future if prices on oil will remain stable, close to $80 per barrel or higher.

As for the inflation rate, the index of prices on goods and services will grow by 7-8 percent during the current year. Official Russian forecasts predict the annual growth of inflation on the level of 6.5-7.5 percent. The WB’s report also says that the level of poverty in Russia will return to the pre-crisis period – 12.5 percent – already this year.

Russia’s Ministry for Economic Development said that the nation’s GDP dropped by 0.9 percent in February in comparison with the previous month. The industrial production increased by 4.8 percent vs. January and by 1.9 percent vs. February 2009.