World Bank upgrades Russia’s 2021 GDP projection

Russia will post a stronger-than-expected economic recovery this year. However, United States sanctions, slow vaccination progress, and monetary tightening will drag its growth, the World Bank reported on Wednesday.

The World Bank brought its expectation of Russia’s gross domestic product growth to 4.3% this year from June’s projection of a 3.2% expansion. It also revised 2022’s forecast growth down to 2.8% from 3.2%.

Russia’s economy was lifted by a recovery in domestic demand and high energy prices, the World Bank said.

Its recovery will exceed its neighbor Belarus, which has been devastated by Western sanctions and is in the midst of a political crisis. However, it will be less significant than the other former Soviet republics such as Armenia, Georgia, and Uzbekistan.

The Russian economy has rebounded to pre-pandemic levels after contracting 3% in 2020, the worst decline in 11 years. However, it is likely to lose pace in the next years without further investment from public expenditures.

Meanwhile, the World Bank said economic growth in 2022 will slow down due to steady demand and lower industrial commodity prices.