The World Bank expects a slight recession in the Russian economy this year, according to an upwardly revised forecast on Tuesday due to sustained energy exports, despite the embargo on Russian oil and gas.
Russia is expected to experience a slight contraction in its gross domestic product (GDP) this year, around 0.2%, according to the latest forecasts from the institution, which published an update to its world economic outlook report on Tuesday.
This is a very strong increase compared to previous forecasts, dating from last January, for which the World Bank (WB) anticipated a 3.3% contraction of the Russian economy. However, it is still below the latest forecasts by the International Monetary Fund (IMF) in mid-April, which for its part expected slight growth of around 0.7% for 2023.
Redirection of oil exports to India and China
According to the World Bank, this improvement in the Russian economic situation is due to the “continuous flow of exports” of gas and oil, the country having managed to “redirect its oil exports to new destinations without impacting the volume” exported. While exports to Europe have fallen sharply, according to OECD data taken by the World Bank, they have been largely offset by strong increases in India and other regions of the world, as well as, to a lesser extent, China.
This much weaker contraction of the Russian economy than is now expected, and also stronger-than-expected Chinese growth in January (5.6% now expected vs. 4.3% initially) mainly support expected growth in emerging countries. and, to a greater extent, global growth. The World Bank now expects it at 2.1%, up from 1.7% in January, before rising to 2.4% in 2024 (up from 2.7% initially). In mid-April, the IMF for its part announced growth of 2.8% in 2023, after 3% in 2024.
Among advanced economies, the United States appears poised to avoid a recession this year, with growth expected to be 1.1% (+0.6 percentage points) before slowing in 2024 to 0.8% (-0.8 percentage points). By contrast, the Eurozone should register slight growth in 2023 (0.4%), while the World Bank originally expected zero growth, before accelerating in 2024 to 1.3% (-0.3 percentage points).
Source: BFM TV
