OECD Predicts Growth for Russia in 2017

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The Organisation for Economic Cooperation and Development, or OECD, has improved Russia's GDP forecast

According to a report on the world economy released by the OECD on Nov. 28, the economy will shrink by 0.8% this year and will rebound by the same amount in 2017.

It was predicted in June that Russia's GDP in 2016 would decrease by 1.7% and rise by 0.5% the following year. In 2018, the economy is expected to add 1%.

This year’s inflation will stay at a level of 7.2% and slightly drop to 5.9% in 2017 and 2018. The June forecast assumed inflation at 7.3% this year and 5.3% in 2017.

“After two years of recession, the economy will return to growth in 2017, as higher real wages boost private consumption and lower interest rates support investment,” the report said. The recovery will rely on oil prices, analysts believe.

On Nov. 28, Morgan Stanley lowered Russia's growth forecast for 2017 from 1.4% to 1.2%. According to the Ministry of Economic Development, the GDP from January to October decreased by 0.7%.

Russia’s First Deputy Prime Minister Igor Shuvalov reckons that the country’s economy has gone back to normal and that GDP growth next year will reach 1%. Russia is past the most strenuous period, Shuvalov claims.

Earlier this month, Anton Siluanov, Russia’s finance minister, stated that despite low oil prices and sanctions pressure, Russia's economy has kept itself afloat.

The OECD is one of the leading global economic organisations, bringing together 35 of the most developed countries. Its headquarters are located in Paris.