english issue
World Bank : Russia returns to growth next year
Russia ’ s economy will continue facing pressure from lower crude oil prices and sanctions , though growth returns by next year , the World Bank said Wednesday . The World Bank said a recession in Russia is expected to eat away at progress meant to equalize the distribution of wealth in the country , with the poverty rate expected to increase nearly a full percentage point to 14.2 percent this year . If its forecast is accurate , the World Bank said that would erase nearly 10 years of progress . Andras Horvai , the World Bank ’ s director for Russia , said long-term growth depends on how well the Kremlin can bolster investor confidence with appropriate reforms . « Administrative barriers to doing business , high transportation and logistics costs , and the perception of an uneven playing field all discourage investment , particularly in the non-resource sectors ,» he said in a statement . The Central Bank of Russia in January announced a decision to keep its interest rate at 11 percent , citing potential for further pressure on inflation and currency valuations . Citing oil prices as a risk factor , the bank said negative pressure was sustained by an oversupplied market and slowing in the Chinese economy . The Russian economy depends heavily on crude oil and natural gas exports , leaving the budget under pressure in the market downturn . Russian President Vladimir Putin has suggested oil priced at $ 50 per barrel may trigger a recovery in the economy , a price point that ’ s about 22 percent above the current level . The Central Bank said market conditions are likely to deteriorate further and possibly require it to tighten its monetary policies . Inflation is expected to move from around 10 percent to 7 percent , but risks to the downward trajectory remain . The World Bank gave credit to Russian fiscal monitors for some progress made in adjusting the economy to the era of lower crude oil prices and Western-backed sanctions . « The fiscal impact of the adjustment was less severe for Russia than it was for other oil exporters , though a fiscal consolidation plan remains necessary ,» World Bank economist Birgit Hansl said . According to the World Bank , the Russian economy shrinks 1.9 percent this year before returning to a growth rate of 1.1 percent in 2017 .
OIL & GAS business / NUMÉRO 14 / Avril 2016 / 51