The World Bank expects a slight recession in the Russian economy this year thanks to the preservation of energy exports despite the embargo on oil and natural gas from Russia, according to the international financial institution published on Tuesday, AFP reported.
Russia’s gross domestic product is expected to record a modest contraction of 0.2% this year, a significant improvement from previous World Bank estimates published in January that projected the Russian economy to contract by 3.3% in 2023. However, the World Bank is still more skeptical than the International Monetary Fund, which announced in mid-April that in the case of Russia, it expects economic growth of 0.7% in 2023, notes Agerpres.ro.
New directions for oil export
According to the World Bank, the improvement of the economic situation in Russia is explained by the “continuous flow of oil and gas exports”, since the country managed to reorient oil exports to new directions, which affected the volume of exports.
Although exports to Europe fell sharply, according to OECD data obtained by the World Bank, this decline was largely offset by large increases in exports to India and other regions of the world, and to a lesser extent to China.
This is much more modest than previously expected, a contraction in the Russian economy and stronger-than-expected growth in China’s economy in January (5.6% vs. 4.3% initially) support the economic growth the World Bank expects for developing countries, and in general, for the world economy.
Economic estimates of the World Bank
The World Bank currently expects the global economy to grow by 2.1% this year, up from a 1.7% forecast in January, and to accelerate to 2.4% next year, down from the 2.7% growth originally forecast .
By comparison, the International Monetary Fund announced in April that it expects global gross domestic product to grow by 2.8% this year and 3% in 2024.
The World Bank Group, one of the largest sources of financing and expertise for developing countries, is taking swift and comprehensive action to help developing countries strengthen their response to the challenges of the pandemic.
Photo: Dreamstime.com
Source: Hot News
Lori Barajas is an accomplished journalist, known for her insightful and thought-provoking writing on economy. She currently works as a writer at 247 news reel. With a passion for understanding the economy, Lori’s writing delves deep into the financial issues that matter most, providing readers with a unique perspective on current events.