Photo: Valery sharifulin/TASS
The organization for economic cooperation and development (OECD) raised its forecast for the Russian economy: it now expects a less deep fall of GDP by the end of 2016 and the stronger growth in 2017
Russia’s GDP will decline by 0.8% in the current year, but in 2017 will increase by the same 0.8%, follows from an updated global economic Outlook OECD. In 2018, the Russian economy will grow by 1%, awaiting organization.
In the previous forecast in June 2016, the OECD predicted the decline of the Russian economy by 1.7% in 2016 and an increase of 0.5% in 2017.
The new projection by the OECD in Russia do not differ from the baseline forecast of economic development for 2016-2017 projected budget (Ministry predicts a decrease of 0.6% growth 0.6%, respectively). But in 2018 the Russian government expects economic growth of 1.7% and the OECD is waiting for only 1%.
The return of the Russian economy to growth after two years of recession will be provided by growth in private demand and investment in fixed assets, follows from the forecast of the OECD. The organization forecasts growth in private consumption in 2017 by 0.5% after falling 3.4% in 2016 and increase in gross investment in fixed capital by 0.7%, following three consecutive years of decline.
The Effect Of Tramp
In the whole world, the OECD raised the growth forecast from 3.2% to 3.3% in 2017 and expects acceleration in global growth to 3.6% in 2018. The OECD’s optimism for the next couple of years linked to the economic plan elected President of the USA of Donald trump. “Fiscal stimulus projected in the United States and China, together with the weakening of the efforts of fiscal consolidation in Europe — the main reason for the expected acceleration in global economic growth from 2.9% in 2016 and 3.6% in 2018,” — said at the presentation of the forecast in Paris, OECD Secretary-General angel Gurria.
“Now there is some prospect of entering the world from the trap of low growth,” said Gurria.
The OECD has previously urged the government to actively use fiscal levers to stimulate economic growth to bring the economy from a “low growth trap”. It’s going to do the tramp in the United States, and the expected effect of the policies of the new President — “an important component of the new forecast,” said the Financial Times chief economist of the OECD Catherine Mann. The organization predicts U.S. GDP growth in 2017, 2.3% (versus 2.1% expected before the election) and accelerating to 3% in 2017 — that is, to the maximum since 2005.
The OECD is the first international economic Institute, who presented an impact evaluation of a trump presidency on economic growth in the U.S. and in the world. Trump promises to increase public spending is to invest $1 trillion in infrastructure over ten years, but at the same time reduce taxes (details yet). But he also promised to set trade barriers to products from China and Mexico, and the OECD warns that the rise in protectionism would negate the positive effects from fiscal stimulus.