Russia Economic Report, November 2017, No. 38

Abstract

Global growth gained momentum in 2017. After slowing to 2.4 percent in 2016 as investment and trade weakened, global growth accelerated to a projected 2.7 percent for 2017.Moreover, the recovery has been broad-based.Global trade also continued to strengthen and external financing conditions remain benign.Amid these positive tailwinds, along with firming oil prices and growing macro-stability, the Russian economy returned to modest growth in 2017. The growth momentum of the second half of 2016 spilled over to 2017 and was especially strong in the second quarter this was supported by a rebound in domestic demand in the first half of 2017—which also contributed to a growth slowdown starting in the third quarter.On the production side, mineral resource extraction, transportation, and state management and provisioning for national security drove growth in the first quarter of 2017.Monetary policy remained prudent and consistent with the inflation-targeting framework. However, improvement in headline indicators masks underlying disparities and remaining vulnerabilities.