Russia Facing a 2 Year Recession

Russia faces two years of recession as the sharp fall in oil prices adds to the problems of an economy beset by structural weakness, the European Bank for Reconstruction and Development has warned.

The EBRD, set up after the collapse of communism in the early 1990s, said Russia would contract by 4.5% in 2015 and by almost 2% in 2016, with knock-on effects on neighbouring countries.

And it warned that an escalation of the conflict with Ukraine could, in extreme circumstances, become a threat to the global economy.

Publishing economic forecasts at the start of its annual meeting in Tbilisi, Georgia, the EBRD said: “Deep recession in the Russian economy is having larger-than expected negative spillover effects on countries with which it has strong economic links. The impact of the Russian downturn has worsened the outlook for eastern Europe and the Caucasus and for central Asia.”

Russia could face a protracted period of slow growth or stagnation, it said, exacerbated by the fact it is overly dependent on the oil and gas sector. “Low oil prices and sanctions have taken their toll on an already weak economy with deep-seated structural problems,” the EBRD said.

via The Guardian

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.