Russian 2010 growth forecast cut to 4.5 percent: World Bank

16th June 2010, Comments 0 comments

The World Bank on Wednesday cut its 2010 growth forecast for Russia to 4.5 percent from 5-5.5 percent previously, but said a strong fiscal position dampened the risks from Europe's budget crisis.

Russia was hard hit by the global economic crisis, with the economy contracting 7.9 percent last year, but reserve funds built up in times of high oil prices have helped it avoid the problems currently engulfing European Union states.

"Amid heightened global uncertainties, Russia is experiencing a bumpy recovery," the Bank said in its latest report on Russia.

"Domestic demand is rising, but unemployment remains high, and credit and investment remain limited."

"The debt crisis in Western Europe sharpens the downside risks to global recovery and oil prices.

"But the effects on Russia are likely to be blunted by its stronger fiscal and debt positions and by limited trade and financial links with the affected countries."

"Russias fiscal and debt outlook is much less pressing than in other countries because both fiscal deficits and debt-to-GDP ratios are much lower," it added.

© 2010 AFP

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