“Russia faces two years of recession as the sharp fall in oil prices adds to the problems of an economy beset by structural weakness,” a daily UK newspaper quoted the European Bank for Reconstruction and Development.
Analysts at the EBRD expect the Russian economy to contract by 4.5% in 2015 and by almost 2% in 2016, with knock-on effects on neighbouring countries.
They cautioned that an escalation of the conflict with Ukraine could, in extreme circumstances, become a threat to the global economy.
“Deep recession in the Russian economy is having larger-than-expected negative spillover effects on countries with which it has strong economic links. The impact of the Russian downturn has worsened the outlook for eastern Europe and the Caucasus and for central Asia,” the EBRD said after its economic forecast in the beginning of the annual meeting in Tbilisi.
Russia is likely to face a protracted period of slow economic growth or stagnation exacerbated by a very high dependence on the oil and gas sector. The Ukrainian problem was also noted. The EBRD forecasted that the country will go into an even deeper recession than Russia this year. Experts predicted that the economic growth rate in Ukraine will contract to 7.5%.
