OECD expects Russian GDP to shrink 4% in 2015, 0.4% in 2016
MOSCOW. Nov 9 (Interfax) - The Organisation for Economic Co-operation and Development (OECD) expects Russian GDP to shrink 4% in 2015 and 0.4% in 2016, the OECD said in a statement.
The latest outlook is worse than the 3.1% decline and 0.8% growth that the OECD forecast in June.
The OECD gave its first 2017 forecast, which is for 1.7% growth. The organization previously forecast the transition to growth as early as the second half of this year.
"The economy is in recession. Falling oil prices, international sanctions and capital flight have reduced investment, domestic consumption and imports. The large depreciation of the ruble has pushed inflation to double digits and reduced real incomes, especially of the poorest. Recovery will be only gradual against the backdrop of an uncertain external environment and lack of structural reforms. Unemployment will rise from the current low levels. Growth is projected to turn positive in 2017 as exports strengthen and domestic demand recovers," the OECD said on November 9.
Annual inflation is expected to accelerate to 15.6% this year, from 7.8% in 2014, but subsequently to decelerate to 9.5% in 2016 and 6.1% in 2017. The inflation forecasts are better than the June outlook, which saw consumer prices rising 16.3% in 2015 and 7% in 2016.
Russia might have a budget deficit of 4% of GDP in 2015 and 3.2% in 2016, compared with 3.7% and 1.2% forecast in June. The deficit will likely narrow to 1.8% in 2017.
Russia will have a balance of payments surplus of 6.6% in 2015-2016 and 6.2% in 2017.
The Central Bank of Russia expects the economy to decline by 0.5%-1% in 2016 if oil trades at $50 a barrel, but the Economic Development Ministry and Finance Ministry expect it to grow 0.7%. Analysts told Interfax in a consensus forecast at the end of October that they thought GDP would fall 3.8% this year and that there would be zero growth in 2016.
