16 Oct 2009 15:13

Corrected: EBRD improves Russian GDP growth forecast to 3.1% in 2010

(To correct figures in third paragraph of news item issued at 17:11 on October 15)

MOSCOW. Oct 15 (Interfax) - The European Bank for Reconstruction and Development (EBRD) has upgraded its 2010 Russia GDP growth forecast to 3.1% from the 2.5% it predicted in May, the EBRD said in materials.

Russia will therefore outpace other emerging economies, which the EBRD expects to average up 2.5% in 2010.

But the EBRD worsened its outlook for 2009: it now expects the Russian economy to shrink 8.5% this year, compared with its May forecast of 7.5%.

The EBRD said that possibility for a revival in economic activity among the countries with transitional economies would be especially uncertain for Russia and Kazakhstan. Although the countries' budget positions look more favorable, they have weak banking systems, a high rate of problematic loans and much dependency on raw materials export.

In 2009, the decline in Kazakhstan's economy will be much less at around 1.3%. The country's GDP in 2010 is expected to increase by around 1.6%.

The perspectives for a revival in economic development of Russia and Kazakhstan will hinge on the success of these countries' governments to clean up their banking systems. The revival of the world economy, especially in terms of commodities prices, will also play a substantial role.