WB improves Russias forecasts.

By bne IntelliNews June 9, 2011
In its latest economic outlook, World Bank improved the some of the forecasts on Russias fundamentals, while GDP growth forecast remained unchanged at 4.4% in 2011 and 4% in 2012. WB notes that growing internal demand and recovering crediting are having a growing effect on economic growth. At the same time due to growing oil prices, consolidated budget forecasts improving to surpluses of 0.4% of GDP in 2011 and of 0.6% of GDP in 2012, even taking additional spending in education and healthcare recently discussed. WB warns, however, against high volatility of the commodity prices. Inflation forecast for 2011 stands at 7.5%-8% (vs. previous 8%-9%) and for 2012 at 7%. Nevertheless, WB believes that macroeconomic balance is still shifted towards inflation, with additional risks of inflationary pressures due to unpredicted additional pre-election spending. CA surplus this year is seen by the World Bank at USD 63bn (about 3% of GDP), shrinking to USD 10bn in 2012, with balance of payments remaining stable throughout 2011 due to high oil prices and volatile capital flows.

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