Russia: World Bank November Economic Report
Overview:The World Bank notes in its latest Economic Report that economic growth in Russia will be slightly weaker than it had predicted this year due to a very weak H1 but, at the same time, there are concrete signs of recovery in recent months. Q-o-q growth is likely to be positive in both Q3 and Q4, suggesting that GDP could expand by 3.2% y-o-y next year. Inflation is falling, unemployment has peaked and the fiscal deficit is likely to be smaller than had been feared. However, the recovery is still fragile and led more by net exports than domestic demand. Hence, an overly rapid appreciation of the ruble could prove problematic. With real wages falling, credit still constrained (despite lower policy rates) and the private sector still repairing its balance sheet a more even recovery may not be apparent until 2011.