Publication: Russia Economic Report, No. 36, November 2016: The Russian Economy Inches Forward - Will that Suffice to Turn the Tide?
Loading...
Published
2016-11
ISSN
Date
2016-11-16
Author(s)
Editor(s)
Abstract
Global growth is weak. It slowed down to 2.2 percent in the first half of 2016. While the Brexit vote has had a limited impact on global growth so far, growth in advanced economies (AE) has been disappointing. Amidst external headwinds, the recession continues in Russia, although the pace of gross domestic product (GDP) decline has slowed down. After a prolonged recessionary period, headline economic and financial trends and indicators are now picking up. Fiscal tightening at the federal level may also adversely affect the performance of some regions. For 2016, the authors project growth of the Russian economy at -0.6 percent, an improvement from earlier June forecast of -1.2 percent. This growth upsurge, however, is unlikely to turn the tide in terms of building a more diversified economy. While a detailed analyses of structural issues is beyond the scope, bolstering investor sentiment towards Russia by reducing policy uncertainty will help. One important step forward, particularly in light of eroding fiscal buffers with the reserve fund expected to be depleted in 2017, is a return of the medium-term fiscal framework.
Link to Data Set
Citation
“World Bank Group. 2016. Russia Economic Report, No. 36, November 2016: The Russian Economy Inches Forward - Will that Suffice to Turn the Tide?. © World Bank. http://hdl.handle.net/10986/25357 License: CC BY 3.0 IGO.”
Digital Object Identifier
Associated URLs
Associated content
Other publications in this report series
Journal
Journal Volume
Journal Issue
Collections
Related items
Showing items related by metadata.
Publication Russia Economic Report, No. 41, June 2019(World Bank, Washington, DC, 2019-06)Real GDP growth in Russia surpassed expectations in 2018, reaching 2.3 percent, mostly due to one off effects of energy construction. Forecasted growth of 1.2 percent in 2019 and 1.8 percent in 2020 and 2021 reflects a more modest outlook. Russia’s macro-fiscal buffers remain strong, with fiscal surpluses across all tiers of government and low public-debt levels. When compared to advanced economies, Russia spends less on health and education. Rebalancing in favor of these categories could improve the overall efficiency of public spending. Short-term inflationary risks have abated, with the Bank of Russia signaling a return to a neutral policy rate. Lending activity is recovering, but the banking sector remains afflicted with high concentration and state dominance. Having eased slightly, the poverty rate remains in double digits with many households close to the poverty line and lacking formal employment. Informal employment is rising in the face of close-to-zero net job creation by medium-sized and large formal enterprises. Key risks to medium-term growth include the expansion of economic sanctions, renewed financial turmoil in EMDEs, a dramatic drop in oil prices, and souring of the global trade environment. The recent double-digit expansion in household credit may also pose a risk to financial stability in the case of a deterioration in the macroeconomic environment.Publication Russia Economic Report, No. 30, September 2013 : Structural Challenges to Growth Become Binding(Washington, DC, 2013-09)Russia's economy lost steam in 2013. Growth slowed to 1.4 percent in the first half (H1) of 2013, compared to 4.5 percent in H1 2012. This report examines in its first part several aspects of the economic slowdown. It shows that the slowdown was largely the result of weaker demand, which was due to a combination of external and domestic factors, some of which are cyclical and others structural. The structural challenges to the Russian economy and its growth, such as non-competitive sectors and markets, are another important factor to consider in the economic slowdown. The special focus note in part three of this report discusses the link between growth patterns in Russia, firm survival and diversification in manufacturing and will also highlight the impact of limited competition as a structural constraint. This note looks at the role of growth volatility as a possible explanation. It examines the role of surges and slumps in manufacturing output and its microeconomic implications in the dynamics of emergence and sustainability of nascent economic activities. The dynamics of the industrial output of the economy as whole, between 1993 and 2009, are the focus of this study. This note examines the downturns that magnify and accelerate the cleansing effects to the economy in forcing inefficient firms to exit, as well as the upturns that set the foundations of economic diversification by giving new economic activities the opportunity to emerge. This note has three main findings. First, Russian manufacturing output growth is characterized by a higher volatility than other comparator countries. Second, this volatility is mostly driven by more numerous, deeper and longer slumps and is mostly associated with aggregate slumps that have yearly effects. Third, while the economic surges increase the probability that productive firms remain in the market, the same is not true of economic slumps-older firms, not necessarily more productive ones, are more likely to survive the downturn. Furthermore, in sectors in which competition is less fierce, firms have a higher likelihood of weathering a slump.Publication South East Europe Regular Economic Report, No. 8, Fall 2015(World Bank, Washington, DC, 2015-09)Economic activity in the six South East European countries (SEE6) is picking up speed, and growth in the region is expected to average 1.8 percent for 2015. The highest growth rates projected are 3.4 percent for Montenegro and 3.2 percent for FYR Macedonia; the lowest is Serbia’s 0.5 percent. Although they trail the rest of the SEE6 region, Serbia and Bosnia and Herzegovina, which were hit heavily by floods in mid-2014, are recovering faster than expected. As 2015 progresses, a recovery in domestic demand is stimulating economic growth throughout the region. Private investment has become the main driver of growth. Developments in the global economy have also helped, especially lower oil prices and a pick-up in demand in the European Union (EU), a major market for the region.Publication Russia Economic Report, No. 31, March 2014 : Confidence Crisis Exposes Economic Weakness(Moscow, 2014-03)Real Gross Domestic Product or GDP growth slowed to an estimated 1.3 percent in 2013 from 3.4 percent of 2012. In January 2013, we projected 3.6 percent growth for 2013, but while the global economy has continued to improve at a moderate pace, Russia's is struggling to find its footing. The first part of this report explores the recent economic developments that underlie this slowdown. To emerge from the downturn with improved long-term prospects Russia will need a combination of cyclical and structural policy measures. As the relative weight of the reasons for Russia's downturn is tilted toward structural factors, structural measures will need to lead the rebound. The lack of more comprehensive structural reforms in the past has led to a gradual erosion of investor confidence. This was masked by a growth model based on large investment projects, continued increases in public wages, and transfers, all fueled by sizeable oil revenues. Recent events around the Crimea have compounded the lingering confidence problem into a crisis of confidence and more clearly exposed the economic weakness of this growth model. Investor pessimism became the decisive factor affecting Russia's economic outlook, presented in part two of the report. The special focus note in part three discusses the link between Russia's growth in the past decade and how it fueled an unprecedented growth in household welfare.Publication South Africa Economic Update : Fiscal Policy and Redistribution in an Unequal Society(Washington, DC, 2014-11)The global economic recovery remains uneven, as growth in the United States is gaining momentum but appears to be at risk of stalling in the Euro Area and Japan. U.S. growth is expected to gain pace over the rest of the year and into 2015 as employment prospects boost real income growth and confidence. Following the Euro Area s exit from recession in 2013, GDP was flat in 2014, and preliminary data for the third quarter suggest slowing growth momentum amid weak domestic demand, ongoing balance sheet adjustments, a fragmented banking sector, and rising geopolitical risks. In Japan, a sales tax hike in April caused a more significant contraction in activity than expected, while exports failed to pick up.
Users also downloaded
Showing related downloaded files
Publication World Development Report 2006(Washington, DC, 2005)This year’s Word Development Report (WDR), the twenty-eighth, looks at the role of equity in the development process. It defines equity in terms of two basic principles. The first is equal opportunities: that a person’s chances in life should be determined by his or her talents and efforts, rather than by pre-determined circumstances such as race, gender, social or family background. The second principle is the avoidance of extreme deprivation in outcomes, particularly in health, education and consumption levels. This principle thus includes the objective of poverty reduction. The report’s main message is that, in the long run, the pursuit of equity and the pursuit of economic prosperity are complementary. In addition to detailed chapters exploring these and related issues, the Report contains selected data from the World Development Indicators 2005‹an appendix of economic and social data for over 200 countries. This Report offers practical insights for policymakers, executives, scholars, and all those with an interest in economic development.Publication Argentina Country Climate and Development Report(World Bank, Washington, DC, 2022-11)The Argentina Country Climate and Development Report (CCDR) explores opportunities and identifies trade-offs for aligning Argentina’s growth and poverty reduction policies with its commitments on, and its ability to withstand, climate change. It assesses how the country can: reduce its vulnerability to climate shocks through targeted public and private investments and adequation of social protection. The report also shows how Argentina can seize the benefits of a global decarbonization path to sustain a more robust economic growth through further development of Argentina’s potential for renewable energy, energy efficiency actions, the lithium value chain, as well as climate-smart agriculture (and land use) options. Given Argentina’s context, this CCDR focuses on win-win policies and investments, which have large co-benefits or can contribute to raising the country’s growth while helping to adapt the economy, also considering how human capital actions can accompany a just transition.Publication Digital Africa(Washington, DC: World Bank, 2023-03-13)All African countries need better and more jobs for their growing populations. "Digital Africa: Technological Transformation for Jobs" shows that broader use of productivity-enhancing, digital technologies by enterprises and households is imperative to generate such jobs, including for lower-skilled people. At the same time, it can support not only countries’ short-term objective of postpandemic economic recovery but also their vision of economic transformation with more inclusive growth. These outcomes are not automatic, however. Mobile internet availability has increased throughout the continent in recent years, but Africa’s uptake gap is the highest in the world. Areas with at least 3G mobile internet service now cover 84 percent of Africa’s population, but only 22 percent uses such services. And the average African business lags in the use of smartphones and computers as well as more sophisticated digital technologies that catalyze further productivity gains. Two issues explain the usage gap: affordability of these new technologies and willingness to use them. For the 40 percent of Africans below the extreme poverty line, mobile data plans alone would cost one-third of their incomes—in addition to the price of access devices, apps, and electricity. Data plans for small- and medium-size businesses are also more expensive than in other regions. Moreover, shortcomings in the quality of internet services—and in the supply of attractive, skills-appropriate apps that promote entrepreneurship and raise earnings—dampen people’s willingness to use them. For those countries already using these technologies, the development payoffs are significant. New empirical studies for this report add to the rapidly growing evidence that mobile internet availability directly raises enterprise productivity, increases jobs, and reduces poverty throughout Africa. To realize these and other benefits more widely, Africa’s countries must implement complementary and mutually reinforcing policies to strengthen both consumers’ ability to pay and willingness to use digital technologies. These interventions must prioritize productive use to generate large numbers of inclusive jobs in a region poised to benefit from a massive, youthful workforce—one projected to become the world’s largest by the end of this century.Publication Classroom Assessment to Support Foundational Literacy(Washington, DC: World Bank, 2025-03-21)This document focuses primarily on how classroom assessment activities can measure students’ literacy skills as they progress along a learning trajectory towards reading fluently and with comprehension by the end of primary school grades. The document addresses considerations regarding the design and implementation of early grade reading classroom assessment, provides examples of assessment activities from a variety of countries and contexts, and discusses the importance of incorporating classroom assessment practices into teacher training and professional development opportunities for teachers. The structure of the document is as follows. The first section presents definitions and addresses basic questions on classroom assessment. Section 2 covers the intersection between assessment and early grade reading by discussing how learning assessment can measure early grade reading skills following the reading learning trajectory. Section 3 compares some of the most common early grade literacy assessment tools with respect to the early grade reading skills and developmental phases. Section 4 of the document addresses teacher training considerations in developing, scoring, and using early grade reading assessment. Additional issues in assessing reading skills in the classroom and using assessment results to improve teaching and learning are reviewed in section 5. Throughout the document, country cases are presented to demonstrate how assessment activities can be implemented in the classroom in different contexts.Publication Lebanon Economic Monitor, Fall 2022(Washington, DC, 2022-11)The economy continues to contract, albeit at a somewhat slower pace. Public finances improved in 2021, but only because spending collapsed faster than revenue generation. Testament to the continued atrophy of Lebanon’s economy, the Lebanese Pound continues to depreciate sharply. The sharp deterioration in the currency continues to drive surging inflation, in triple digits since July 2020, impacting the poor and vulnerable the most. An unprecedented institutional vacuum will likely further delay any agreement on crisis resolution and much needed reforms; this includes prior actions as part of the April 2022 International Monetary Fund (IMF) staff-level agreement (SLA). Divergent views among key stakeholders on how to distribute the financial losses remains the main bottleneck for reaching an agreement on a comprehensive reform agenda. Lebanon needs to urgently adopt a domestic, equitable, and comprehensive solution that is predicated on: (i) addressing upfront the balance sheet impairments, (ii) restoring liquidity, and (iii) adhering to sound global practices of bail-in solutions based on a hierarchy of creditors (starting with banks’ shareholders) that protects small depositors.