The latest forecast for Russia from the Bank of Finland’s Institute for Economies in Transition (BOFIT) sees Russian GDP growth exceeding 3.5 % p.a. in 2012 and 2013, followed by slightly lower growth in 2014. A key assumption in the forecast is that world oil prices will decline slightly over the next two years. Russian imports rebounded sharply in the past few years after the 2009 recession, but growth in the forecast period is expected to be much more subdued. The forecast is largely exposed to downside risks generated by uncertainty in the global economy that could weigh on Russian consumption, exports and capital investment.
The Chinese economy is predicted to show strength, despite the modest slowdown projected. As a result of stimulus measures, China can expect GDP growth of around 8 % p.a. in 2012 and 2013. As the stimu-lus effects fade and structural challenges become more binding, GDP growth should slow in 2014 to around 7 %. Although China still enjoys some leeway in dealing with economic problems, it is constrained by various problems caused by excessive bank lending during the 2009-2010 stimulus. Risks of poorer than forecasted performance have, however, increased as a result of the deterioration of the global economy.
The latest forecasts are posted at http://www.bof.fi/bofit.
For further information:
Russia desk: Mr Vesa Korhonen, Senior economist, +358 10 831 2834 / vesa.korhonen(at)bof.fi
China desk: Mr Jouko Rautava, Senior economist, +358 10 10 831 2280 / jouko.rautava(at)bof.fi
Russia/China: Mr Iikka Korhonen, Head of BOFIT, +358 10 831 2272 / iikka.korhonen(at)bof.fi
China desk: Mr Jouko Rautava, Senior economist, +358 10 10 831 2280 / jouko.rautava(at)bof.fi
Russia/China: Mr Iikka Korhonen, Head of BOFIT, +358 10 831 2272 / iikka.korhonen(at)bof.fi