Russia’s high growth last year was spurred by transient factors, and growth is expected to subside to lower levels this year. The outlook for global economic growth darkened considerably over the summer and is reflected in the performance of the Russian economy. Growth slowed much more in the first half of this year than we anticipated in our April forecast. For all of 2019, we now expect growth of around 1 % p.a.

Otherwise, our outlook for the Russian economy in coming years is largely unchanged from earlier forecasts. Stagnating real incomes and decelerating growth rates in household borrowing should supress private consumption growth. Government policies are unlikely to support private investments. In other words, growth in the years ahead will come largely from public consumption and net exports.

Investments stipulated by government’s national projects will lift economic growth slightly, especially in 2020. Growth slows towards 1.5 % p.a. at the end of the forecast period.

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The slowdown in growth continues as China struggles with a shrinking labour force, ineffectual allocation of capital, an increasing role of the state in the economy and postponement of necessary structural reforms. Adding to this is the business cycle downturn and escalating trade tensions during the past year. Given China’s rising public-sector deficit and soaring debt ratio, any room for stimulus is likely to be limited.

With unreliable official figures that often fail to capture economic trends, it is more challenging than ever to assess China’s actual economic conditions. Nevertheless, we expect China’s economic growth to slow this year by about one percentage point from 2018 and slow further in the next two years of our forecast period by just under one percentage point a year. The deteriorating financial positions of Chinese corporations and increasing financial market risks raise the likelihood of a more rapid slowdown in growth.

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For further information

Russia: Senior Adviser Laura Solanko
tel. +358 9 183 2291 / laura.solanko(at)

China: Senior Economist Riikka Nuutilainen
tel. +358 9 183 2518 / riikka.nuutilainen(at)

Russia and China: BOFIT Head Iikka Korhonen
tel. +358 9 183 2272 / iikka.korhonen(at)