ECB: uncertainty in Russia remains high
BRUSSELS. May 6 (Interfax) - Economic activity in Russia continued to decline in Q4 2015 after tentative signs of improvement in Q3 2015, the European Central Bank said in latest Economic Bulletin.
"Uncertainty remains high and business confidence weak, while lower oil revenues continue to restrain public expenditure," the ECB said.
"In Russia, unfavorable demographic trends are also weighing on potential growth. Declines in energy prices and international sanctions imposed as a result of the conflict in Ukraine have also exacerbated long-standing obstacles to investment and growth, such as infrastructure bottlenecks and a poor business climate (which were encouraging capital outflows even before the sharp recession began in 2014)," it said.
The situation in the emerging market economies continue to represent a risk to the global economy, the ECB said, noting that declining demand in those countries has had a negative impact on euro area exports.
"A further broad-based and pronounced slowdown in EMEs could have a sizeable adverse impact on the outlook for the global economy," it said.
"The economic recovery in the euro area is continuing, driven by domestic demand, while foreign demand growth remains weak," the ECB said. "The accommodative monetary policy stance, continued employment gains resulting from past structural reforms and the still relatively low price of oil should provide ongoing support for households' real disposable income," it said.
"At the same time, the economic recovery in the euro area is still dampened by the ongoing balance sheet adjustments in a number of sectors, the insufficient pace of implementation of structural reforms in some countries and subdued growth prospects in emerging markets."