World Bank presented three scenarios for the Russian economy – ID Altapress

World Bank presented three scenarios for the Russian economy – ID Altapress

In his report, analysts point out that Russia is likely to have already reached the potential level of output.

“Despite the difficulties, the slowdown in economic growth in Russia, in all probability, to a greater extent due to structural rather than cyclical factors, which means that the economy may be close to achieving the maximum level of potential output “, – the report says the World Bank.

According to analysts, has exhausted itself and the economic model, based on a broad state participation in the economy.

“Back to the model aims to achieve high rates of economic growth in Russia will depend on the steady growth of private investment and increase consumer confidence that require predictable economic environment and require the resolution of outstanding issues structural reforms “- according to the World Bank.

The baseline scenario assumes that Russia will face stagnation: the projected growth of 0.5% in 2014 and 0.3% and 0.4% in 2015- m and 2016.

The pessimistic scenario assumes growth of tension, resulting in the economy come a long recession. Compared with the 2014 year, when the growth rate will be 0.5%, the economy will shrink by 0.9% in 2015 and 0.4% in 2016.

The optimistic scenario assumes a modest recovery of the economy due to the weakening of the geopolitical tension and the abolition of all sanctions by the end of 2014. Economists in this case predict increase in GDP growth from 0.5% in 2014 to 0.9% in 2015 and 1.3% in 2016.

Analysts also point out that a potential slowdown in the level of production casts doubt on the recent strategy of Russia’s economic growth, based on the direct participation of the state in the economy and an active industrial policy in order to diversify the economy.

In order to avoid stagnation or recession, the World Bank proposes to improve the recruitment of public functions, including the effectiveness of the provision of public services such as health and education. As economists recommend to improve the conditions of competition in all Russian industries. The presence of a dominant market position in inefficient companies prevents an increase in efficiency – wrote “Rosbalt”.