Our latest forecast sees Russian GDP rising by 1.5 % p.a. through 2019 on the assumption that oil prices remain roughly at current levels. Growth will be driven by recovering domestic private demand, which also is expected to support a brisk recovery in imports. Russian economy is already growing close to its potential and achieving faster sustainable growth would require major structural reforms that are currently not in sight.
China’s economic growth has picked up from last year. Official figures show GDP rose by 6.9 % p.a. in the first half of 2017, but with the expected slowing towards end of the year, growth for this year should come in at around 6.5 %. In 2018 and 2019, economic growth should keep slowing gradually as China pulls back from debt-financed stimulus policies to a more sustainable framework. This gradual slowdown is, above all, a natural evolution for China’s economy that reflects on-going structural changes. The financial market risks are elevated and pose a risk to economic growth – and even more so if China continues to push the economy to the 2020 growth target with stimulus policies. Uncertainties related to Chinese statistical data have made it even more difficult to evaluate economic trends.
For further information
Russia: Heli Simola, Senior Economist
Tel. +358 9 183 2263 / heli.simola(at)bof.fi
China: Juuso Kaaresvirta, Senior Economist
Tel. +358 9 183 2107 / juuso.kaaresvirta(at)bof.fi
Russia and China: Iikka Korhonen, BOFIT Head
Tel. +358 9 183 2272 / iikka.korhonen(at)bof.fi