Moscow, December 9, 2014 – The World Bank has updated its economic outlook for Russia for 2015 and 2016 to reflect a further decline and increased volatility in global oil prices. The revised outlook is articulated through three scenarios – a baseline, an upper, and a lower- case – based on different oil price assumptions.
The new baseline, or most likely scenario, assumes an average oil price of US$78 per barrel for 2015 and of US$80 per barrel for 2016. On this basis, real GDP is projected to contract by 0.7 percent in 2015, before increasing by 0.3 percent in 2016.
“In the baseline scenario, investment is projected to contract for a third year in a row in 2015, because of continued uncertainty, restricted access to international financial markets by Russian companies and banks, and lower consumer demand,” said Birgit Hansl, World Bank Lead Economist for the Russian Federation. “For companies in the natural resource sector, lower oil and commodity prices are expected to negatively affect investment decisions. For the first time since 2009, consumption is expected to decline, following a negligible expansion in 2014.”
During 2016, investment activity is projected to remain below its 2014 level, constrained by lingering structural problems and persistent negative business sentiments resulting from geopolitical tension and economic policy uncertainty.