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World Bank lowers Russian growth forecast
Published: 16 June, 2010, 18:30
Edited: 21 June, 2010, 10:15
TAGS: Natural resources, Russia and the global economy, Economy, Finance
The World Bank has lowered its forecast for Russian economic growth in 2010 to 4.5% from the 5.5% predicted earlier.
The bank's chief economist, Zeljko Bogetic, said that Russia was lagging behind other emerging economies because it is more sensitive to swings in the oil price and capital outflows. The country's real GDP in the first quarter of the year rose by 2.9% in the first quarter which is much less than expectations.
“Russia is experiencing a bumpy recovery. It's uneven recovery in the sense that first quarter data was more disappointing than we wanted to see. But nevertheless April data is showing continued recovery of the economy. We do see that unemployment is actually lower in Russia than initially feared and real incomes are growing again for several months. The bank credit is beginning to flow into the economy.”
The World bank says the EU debt crisis will have little impact on Russia due to its limited trade and financial links with the periphery of Europe. Oil prices are expected to stay comfortably over $70/bbl in 2010.
However, it's domestic demand that is expected to provide the main driver of growth, says Bogetic.
“If you you look at the structure, the sources of economic growth both in terms of the demand and sectors we basically see that the growth will primarily come from the domestic demand as unemployment continues to decline and real income continues to grow. It has already grown every month this year. We will see consumption growing and as banks begin to provide more cash for the economy investments are going to pick up as well.”
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The Economist´s "The World in 2010" forecasted for Russia a 2.5% GDP growth while the last number of The Economist Magazine (June) forecasts a 4.8% GDP growth for Russia in 2010...so that means +2.3 over the first forecast...while the change for most countries in the World (China, Germany, Japan, U.S.) is about - 1%. So the difference is one of the most positive in the World.
You have to laugh at the world bank - How to generate a negative Russian view a la world bank style. 1. If a parameter looks good, say a growth of +4% while your western economies are going south at an extreme rate of knots say -3% 2. Then 'estimate' (publicise for effect, short term) Russian growth of say +6% then western growth of -5% 3. Then shortly after, revise the 'estimates' - hey Presto Russia is doing badly as they move down -2% and the west is looking up at +2%. I see the spin swallowers open up and gagging on that! Don't you just love these Banksters! What about the better analysis, that the world bank is a bankster!
Enrique, Absolutely, Russia is actually doing well, given the world financial situation So what is the game of the World Bank. Well simple, to work hand in glove with the fraud rating agencies. To perpetuate their skewed payed for view of the world. So the World bank has to come up with a negative view of Russia and other western targets, regardless how well we are doing, whilst maintaing a positive view on their friends. So we get say a UK sadled in debt, struggling like hell, being talked up - "they are taking the right course of action, or things are looking positive with the right spending controls" to keep the AAA whilst Russia et al. are sadled with lower ratings, no matter what the underlying fundamental figures are. Basically the world bank is actually playing the insane derivative markets itself, with a 'spin future' to support the rating agencies in their payed role. What we need is a published list clearly visible of how correct their estimates were, with sackings of their economists and a negative rating shown of the world bank if they are wrong, not just allow them to play with no accounatbility. Because at the moment they do what they like, in bed with the rating agencies and the rest of the financial elite. There is no comback for the fraudulent spin they feed into the markets on a regular basis. We should be asking in G20 for control on Rating agencies procedures, making them objective,open and devoid of spin, and also the creation of legal accountability for forecasts by market affecting bodies.