The World Bank downgraded the forecast for the Russian economy in 2016

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The World Bank downgraded its forecast for the Russian economy in 2016 in the baseline scenario to 1.9%, compared to 0.7%, which he expected in December 2015. Such an assessment reduction of Russia’s GDP by 0.7% — this is the most optimistic forecast, whereas a pessimistic look like economic decline by 2.5%. The World Bank gave a forecast in its today’s 35th report on the Russian economy, «Long way of economic recovery.» The process of adaptation of the Russian economy to lower oil prices and the preservation of sanctions in 2016 will continue, but the World Bank does not expect the lifting of sanctions before 2018, although calculated one alternative scenario in view of their cancellation in 2017. «In view of the unfavorable external environment, the path of the Russian economy to recovery will be long and difficult,» — the report says. The main task for the Russian authorities became the restructuring of the budget system and the financial sector, because all of the earlier measures were temporary. «Returning to the realistic macroeconomic parameters is a fundamental importance, as it will help to improve consumer and business confidence by reducing uncertainty budget», — assured the bank. Still low growth potential of the economy limits the medium-term prospects of its development, although in the long term, we can see new opportunities. Thus, the main task of the government in the long term, the bank’s analysts see the increase in the overall competitiveness of the economy and the promotion of sustainable diversification outside of the commodities sector.

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