BOFIT Viikkokatsaus / BOFIT Weekly 2019/42

The latest World Economic Outlook from the International Monetary Fund (IMF) sees growth of the global economy slowing this year to 3 % and then accelerating next year to 3.4 %. The 2020 pick-up in growth should come from EU countries and accelerating growth in certain emerging economies such as India and Brazil. This suggests that the trough of slowdown in global growth should be seen this year. Global growth is forecast to hold at around 3.6 % p.a. from 2021 to 2024.

The IMF expects that Russian economic growth will accelerate in 2020, before stabilising at or just below 2 % a year through 2024. Also the latest BOFIT forecast sees growth of the Russian economy to accelerate from around 1 % p.a. this year to 1.8 % in 2020, mainly due to increased public investment. In the following years, however, growth subsides to around 1.5 %, which is close to what most observers consider Russia’s long-term growth potential. The World Bank’s latest forecast for the economies of Central and Eastern Europe expects Russian economic growth of 1.7 % next year and 1.8 % in 2021. Forecasters hold differing views on how long the phase of faster growth in Russian public investment will last.

IMF estimates that Russia’s GDP per capita adjusted for purchasing power parity (PPP) is about 28,800 dollars this year. The average for EU member states is 43,200 dollars, while it is e.g. 32,000 dollars for Poland, 32,400 dollars for Portugal and 34,200 dollars for Estonia. Among Eastern European countries, the comparable GDP per capita is 9,300 dollars for Ukraine and 7,300 dollars for Moldova.

IMF GDP growth forecasts for select economies, %

Source: IMF.