Russia’s As long ago as October of this past year, the EBRD slashed its growth forecasts for eight economies from central Europe and the Baltics, or even CEB, along with seven economies in southeastern Europe, or SEE, mentioning their close trade and financial connections into the euro zone.
With Strong expansion elsewhere in the international market supporting prices for petroleum and other raw materials, the EBRD’s predictions for Russia were largely unchanged. But in its latest report on the outlook for the economies in which it invests, the growth bank stated the impact of the currency area’s protracted crisis will spread farther east, and drag Russia down. “The negative spillovers are hitting east, and to Russia specifically through two main channels: lower commodity costs and a general reduction in risk appetite,” explained Piroska Nagy, director for country strategy and policy in the EBRD.
As Recently as May, the EBRD forecast that Russia’s economy would grow by 4.2percent this year and 4.3% next, approximately in accord with this 4.3% expansion it enjoyed in 2011. From the development lender’s most current report, those predictions were shrunk to 3.1% and 3.3% respectively. Those forecasts jar together with the Russian government’s opinion. On Friday, Economic Development Minister Andrei Belousov said that the government expects the market to grow by between 3.8% and 4% annually, having earlier forecast it would grow by 3.4%. The EBRD’s warning about the growth forecast follows a report by Moody’s Investors Service Monday that said that if the euro zone’s crisis intensifiesthe Russian economy would contract by 5% over the next 10 to 12 months, and also the ruble could depreciate by 30 percent.
With Its economic fortunes at stake, the Russian government Monday reaffirmed its commitment to encourage the currency area. “We hold 40 percent of our foreign and gold reserves in euros, and we’re not lowering this amount of our reservations, and a few of these reserves have been invested in the government securities of European nations,” President Vladimir Putin said. “We’re not changing anything, we believe in the fundamental chances of the European market ”
The Via” its catastrophe, neither automating it in the long run, nor allowing a major Economy such as Italy or Spain shed access into the international bond markets, Leading to failures in a number of big banks. The evolution bank warned That if the crisis intensify, its prediction for growth in Russia and Elsewhere would be lower