Russia’s GDP growth is expected to reach 1.7 percent in 2018 versus 1.5 percent in 2017, the European Commission (EC) reported on Thursday in their annual spring economic outlook.
“Going forward, the impact of higher oil prices recirculating throughout the economy is likely to further support domestic demand and thereby GDP which is expected to grow by 1.7 percent in 2018,” the document says.
The growth rate may decline to 1.6 percent of GDP by 2019, reflecting lingering effects of Western sanctions, according to the European Commission. “Improved confidence, contained inflation and accommodative monetary policy are set to support domestic demand in the near term, although structural bottlenecks hamper stronger rebound,” the EC reported.
This compares with an EC report that shows the EU and US growing by an estimated 0.6 percent in the final quarter of 2017.
Source: EU Eurostat 7th March 2018
Chris Devonshire-Ellis of Dezan Shira & Associates comments: “The Russian economy is still impacted very much by oil prices, but it is important to note the EC’s comments about improved Russian economic confidence and domestic demand. There are bottlenecks as mentioned but these are also being dealt with via improved infrastructure, investment, and tax reform. We are investing in Russia as an emerging economy with an increasing share in Asian trade and these figures support that longer term dynamic.”
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