Low oil prices and lack of investment will lead to continued recession in the Russian economy in 2016, it follows from the updated forecast of the European Bank for reconstruction and development (EBRD).
Specialists of the Bank made no changes to its November forecast, they still expect that in 2016, Russia’s GDP will shrink by 1.2%. For comparison, in 2015 the country’s GDP fell by 3.7%.
The growth of the Russian economy, according to conclusions of experts of the EBRD, will resume in 2017. According to preliminary estimates, next year Russia’s GDP will grow by 1%.
The EBRD report highlighted that the recession in Russia, coupled with low oil prices will continue to exert pressure on the economy of the Central Asian States and the Caucasus countries. The forecast for GDP growth in 2016 for most of them compared to November significantly reduced. From Kazakhstan, the EBRD experts now expect growth of 1.1% (0.4 percentage points less than in November), from Kyrgyzstan — 1% (to -2.9 p. p.), from Turkmenistan — 6.5% (-2 p. p.), from Uzbekistan – 6,5% (-0,7 p. p.). Stronger than others affected Azerbaijan, whose GDP, according to the new forecast, will be reduced in 2016 by 3%, while previously expected growth of 2.5%.
Russia imposed sanctions and the total losses of the tourism sector on the background of the terrorist attacks, according to the findings of the EBRD, will have an impact on the Turkish economy, whose growth will slow from 4% last year to 3.2%. However, compared to November, the forecast growth of GDP the Turkish economy was improved from 2.8% to 3.2%.