The European Bank for reconstruction and development (EBRD) improved its forecast on growth of Russia's GDP to 1.8% from 1.2% in 2017 and up to 1.7% from 1.4% in 2018, from autumn Bank's report «Regional economic prospects
Russia's economy emerged from a two-year recession in 2017 will grow by about 1.8% with a gradual recovery in oil prices. However, in 2018, the GDP growth in Russia will slow down somewhat in the background of more moderate growth in oil prices will be 1.7%, the report says.«These forecasts are broadly consistent with predicted long-term potential growth rate of 1-2% per year», — the report says.
The EBRD reports that in the first half of this year, Russia's GDP grew by 1.5% thanks to increased activity in trade, metallurgy and transport sectors. There was also a recovery in domestic demand, consumption and investment, while the contribution of net exports turned negative, as imports outpaced the exports.
In January-September of the current year the outflow of capital in the private sector reached about $ 20 billion, which corresponds to the volume of outflow for the entire year of 2016. The reason for this was the withdrawal of funds from the banking sector.
Russian companies were active in the market of external borrowing, the Eurobond issue in January-September increased almost threefold, reaching $ 29 billion, while the volume of syndicated loans fell by a third to 9.4 billion dollars.
The EBRD expects that in 2018 growth will be supported by recovering consumption and investment, as well as higher oil prices and the stabilization of macroeconomics. The main risks for the Russian economy remain the dynamics of oil prices, the lack of reform of the business environment, support investment, geopolitical tensions and the extension of anti-Russian sanctions.
EBRD economists are of the opinion that «without substantial reforms, the long-term growth (of the economy) will remain at the level of 1-2% per year due to low investment and outdated production capacity, weak demographic situation, aging infrastructure, and adverse institutional features of the economy.»