The BOFIT forecast for Russia envisions brisk growth of the economy and even faster growth of imports in 2011–2013. Recovery of the Russian economy from one of the world’s most severe recession-induced declines in output slowed down markedly in autumn of 2010. Following a pick-up in the winter months, GDP growth is expected to slow gradually, from about 5% pa in 2011–2012 to ca 4% in 2013, assuming an oil price of about USD 100 a barrel during the forecast period. GDP growth will be dampened by the continuing rapid growth of imports – ca 15% in 2011 and 10% pa in 2012–2013. The Russia forecast is surrounded by upward and downward risks. For instance, rise of the oil price from the assumed level would support the pace of GDP growth. On the other hand, should Russia’s inflation remain higher than expected, the growth base for private consumption would shrink further. Stronger-than-expected growth of imports would also constrain GDP growth more than forecasted.
Supported by a set of fiscal stimuli geared to promote investment, China was able to continue its rapid economic growth during the international financial crisis. In 2010, the Chinese economy grew by 10.3%. Owing to massive credit extension fuelled by the fiscal stimuli as well as inflationary pressures fed by rising food and commodity prices, Chinese economic policy has shifted in focus to curbing inflation via monetary tightening. As a result, BOFIT expects growth in real GDP to slow down to 9% in 2011 and to 8% in 2012–2013. In the forecast period, in addition to the recent uncertainties in the world economy, inflationary pressures and problems in the real estate sector are the greatest immediate risks to balanced economic development.
The forecasts are posted at http://www.bof.fi/bofit_en
Additional information:
Senior Economist Vesa Korhonen, +358(0)10 831 2834 / vesa.korhonen(at)bof.fi (Russia)
Senior Economist Jouko Rautava, +358(0)10 831 2280 / jouko.rautava(at)bof.fi (China)
Head of BOFIT Iikka Korhonen, +358(0)10 831 2272 / iikka.korhonen(at)bof.fi (Russia and China)