The World Bank has revised the Russian GDP dynamics for this year, forecasting instead of shrinking by 3.3%, the economy will only contract by 0.2%, Tass reported on April 6. (chart)
Despite the problems caused by extreme sanctions, Russia’s economy is preforming better than expected. The Central Bank of Russia (CBR) also recently improved its economic outlook for this year to a range of -1% to +1% for the full year.
The World Bank’s updated estimates reveal that as of the end of 2022, the Russian GDP dropped by 2.1%. However, it predicts that this trend will not continue, and the country's national GDP will contract by just 0.2% this year. Furthermore, the bank forecasts that the Russian economy will grow by 1.2% in 2024 and by 0.8% in 2025.
Comparing these latest forecasts to those made by the World Bank in January 2023, the bank had estimated that the Russian economy would contract by 3.3% in 2023 and grow by 1.6% in 2024.
The upgrade comes on the back of other unexpectedly strong results. S&P Global just released the services PMI index that showed an extremely strong expansion of 58.1 and another good month for the manufacturing PMI. Russia’s business managers remain optimistic about the full year, reporting a recovery in sales.