Page 10 - Eastern Europe Outlook 2020

Source: National sources, RBI/Raiffeisen RESEARCH
Russia Quarterly GDP forecasts
2019FYE
2020FYE
2021FYE
GDP forecast: MinEcon
1.3
2
3.1
GDP forecast: OECD
1.4
1.5
GDP forecast: IMF
1.1
1.9
GDP forecast: CBR
1.2
GDP forecast: World Bank
1.0
1.6
1.8
GDP forecast: Fitch
1.2
1.9
GDP forecast: MinFin
1.3
2.1
3.1
consensus
1.2
2.0
Russia’s economy is basically healthy and solid.​ It’s just not growing fast enough. The problem is not in the ratios and reserves, but in its total lack of dynamism. With growth rates of around 1% for an emerging market that is actually stagnation. The Kremlin is attempting to address this problem, but so far its efforts have been off to a slow start. 2020 should be the year when the pace picks up and it will become clearer how successful the government’s programme will be. The lack of clarity over how likely this is can be seen in the spreads of GDP forecast numbers for 2020.
Growth remains under par and came in at about 1% in 2019, but while most observers expect growth to improve in 2020, but opinions on just how fast it will accelerate are divided. Still, no one expects growth to increase to much beyond 2% in 2020, with the government saying it will then reach 3% in 2021 and most analysts saying it will be less than that.
• GDP growth
The Economic Development Ministry projects Russia’s economic growth at 1.3% in 2019 and 1.7% in 2020.
The World Bank expects the economy to grow 1.2% in 2019 and 1.6% in 2020.
The investment banks, which are more focused on the leading companies, are more optimistic and are predicting slightly faster growth rates.
BCS GM sees growth accelerating gradually from 1.2% y/y in 2019 to 2% in 2020 and 2.3% y/y in 2023​ thanks to public investments, lower lending rates and rising social spending, including ahead of the Duma elections in 2021, which should support domestic demand.
10​ EASTERN EUROPE Outlook 2020​ ​ ​www.intellinews.com