The Bank of Finland Institute for Economies in Transition (BOFIT) today released its semi-annual forecasts for the Russian and Chinese economies.
GDP growth in Russia is projected to remain below 2 % this year. Growth will decelerate slightly next year to around 1.5 % as long as the oil price stays reasonably close to current levels. Growth of the economy will remain relatively slow as there are too few signs of moving ahead with systemic market-friendly reforms that are needed to foster higher growth. The rapid recovery of Russian imports from a deep slump slowed significantly in spring, and the revival is expected to continue at an annual pace of around 5 % during the forecast period.
China’s economic growth is slowing and the outlook has become more uncertain with the country’s rising indebtedness and turbulence from trade policy disputes with the United States. The country’s adherence to a GDP growth target further complicates economic policy as the stimulus needed to meet that target conflicts with government efforts to manage China’s burgeoning debt problems and to move ahead with economic reforms. Acknowledging that problems with China’ s statistical data make it hard to obtain a clear picture of economic conditions, we nevertheless hold to our earlier forecast that Chinese economic growth remains strong despite slowing to around 5 % p.a. in 2020, the final year in this forecast period. While China possesses resources to deal with many of the challenges it may encounter, the deterioration of economic conditions means that it is important to prepare also for a steeper slowdown in China’s growth than predicted in our baseline forecast.
BOFIT forecasts are available online.
For further information:
Vesa Korhonen, senior economist, +358 9 183 3440, firstname.lastname@example.org (Russia)
Jouko Rautava, adviser, +358 9 183 2280, email@example.com (China)
Iikka Korhonen, BOFIT head, +358 9 183 2272, firstname.lastname@example.org (Russia and China).