World Bank cuts growth forecast for Russia
December 15, 2013, 9:05 am

File Photo of Tverskaya street in downtown Moscow with the Historical Museum and Kremlin in the background [Getty Images]

Russia’s economy will expand by 1.3 per cent this year, the World Bank said, down from the 1.8 per cent it predicted in September.

Growth for next year is projected at 2.2 percent, and at 2.7 percent for 2015.

Admitting for the first time that Russia’s economic troubles stemmed from domestic causes, President Vladimir Putin pledged not to abandon the spending promises he made during his re-election last year.

Russia’s Economy Minister Alexei Ulyukayev said in November he expected an annual growth of 1.5 per cent.

“The Bank expects that investment activities will slowly pick up, as the destocking cycle comes to an end and consumption growth will level out,” said Birgit Hansl, World Bank Lead Economist for Russia.

Private investment activities in Russia are expected to cautiously resume during 2014, but at a slightly lower growth rate than originally projected, the World Bank said.

In his annual State of the Nation address, Putin also said “nothing has been done” to implement an initiative he launched a year ago to stem capital flight that has sapped both investment and the Kremlin’s coffers.

The ambitious goals of Russia’s socioeconomic development set in May 2012 presidential decrees will not be revised due to economic difficulties, Putin said.

“The economic cycle can and is changing, but this is no reason to talk about revising our goals,” Putin said.

Putin believes that insufficient measures have been taken by the executive branch of power to implement the ideas offered by the decrees issued by the President in May 2012.

“Where are all these measures? Eighteen months have already passed since the decrees were published. Either something is being done to cause a negative response in society, or nothing is being done at all,” Putin said.

Source: Agencies