Russia outlook grim

MOSCOW: The World Bank on Wednesday downgraded its outlook for Russia’s economy, warning that a biting recession is deepening and will persist into next year, pushing more people below the poverty line.

Weighed down by western sanctions and a plunge in oil prices, Russia’s economy slipped into recession at the start of this year.

The World Bank predicted the Russian economy will shrink by 3.8 per cent in 2015 in its baseline scenario, far worse than its earlier forecast of a 2.7 per cent contraction.

The downturn this year could be as much as 4.3 per cent, it said. “This will accelerate an already troubling rise in the poverty rate,” said the bank’s Country Director for Russia, Andras Horvai.

The bank ditched its earlier forecast of a gentle recovery with 0.7 per cent growth in 2016. It now expects Russian economic output to decline 0.6 per cent next year, with a recovery only appearing in 2017 with growth of 1.5 per cent.