The Bank of Finland’s Institute for Economies in Transition (BOFIT) today released its semi-annual forecasts for the Russian and Chinese economies.
Russia: The GDP has so far this year contracted less than one per cent from a year ago. The decline has been constrained by this year’s recovery in oil prices and a large drop in imports caused by a weak ruble. GDP is expected to shrink by 1 % this year, with imports falling about 7 %. The oil price is expected to creep up from below $45 a barrel this year to just under $55 a barrel in 2018. While GDP recovers gradually in 2017, growth will be slow due e.g. to inadequate fixed investment and the fiscal challenges facing government at all levels. As the economy recovers and Russian export earnings increase, imports will grow moderately. The main forecast risks continuously involve oil prices, imports and government finances.
China: Growth of the Chinese economy this year has slightly exceeded expectations, largely due to the government’s stimulus policies. GDP is now expected to grow about 6.5 % p.a. this year. Even so, China’s overall growth outlook has not changed. Growth should slow to 6 % in 2017 and 5 % in 2018 as part of a natural slowdown in China’s economic development. As structural adjustments proceed, the role of consumer demand and services in the economy will become more pronounced. Concerns over economic development have increased, and the possibility of a rapid deceleration in growth during the forecast period cannot be ruled out.
BOFIT forecasts are available online.
Russia forecast: http://www.suomenpankki.fi/link/6ec6f53e2820432eae5f0d8af4ce6945.aspx?epslanguage=en
China forecast: http://www.suomenpankki.fi/link/630dc99eeb3c481fb757e50874ac3d82.aspx?epslanguage=en
For further information:
Vesa Korhonen, senior economist, +358 10 831 2275 / vesa.korhonen(at)bof.fi (Russia)
Juuso Kaaresvirta, economist, +358 10 831 2107 / juuso.kaaresvirta(at)bof.fi (China)
Iikka Korhonen, BOFIT head, +358 10 831 2272 / iikka.korhonen(at)bof.fi (Russia and China).