BOFIT Forecast for Russia 2016–2018 / 2

Abstract

Russian GDP has so far this year contracted less than one per cent from a year ago. The decline has been constrained by a notable recovery in oil prices and a large fall in imports caused by a weak ruble. We now expect Russian GDP to shrink by 1 % for 2016 overall, with imports falling about 7 %. The oil price is expected to creep up from below $45 a barrel this year to just under $55 a barrel in 2018. While GDP recovers gradually in 2017, growth will be slow due e.g. to inadequate fixed investment and the fiscal challenges facing government at all levels. As the economy recovers and Russian export earnings increase, imports will grow moderately. The main forecast risks continuously involve oil prices, imports and government finances.