Russian economy likely to grow around 2 pct in 2017, says Nordea Bank

The Russian economy has been rebounding steadily this year, surpassing the most upbeat projections made early in 2017. After an unexpectedly solid second quarter growth, the economic growth decelerated slightly in the third quarter but still remained above 2 percent. According to a Nordea Bank research report, the Russian economic growth is expected to settle around 1.9 percent to 2 percent for this year as a whole, as the fourth quarter figures would be contained by the OPEC deal that impacts the mining industry because of the high base effect in 2016.

In spite of the stable rebound, no further acceleration is expected in 2018. The Russian economy is expected to grow 1.8 percent, stated Nordea Bank. The Russian private consumption is on the growth track again, expanding at about the same rate as wages. It is likely to be moderately positive at 2.7 percent. Meanwhile, internal investment demand is also expected to continue to grow; however, at a moderate rate. The current high growth rates are mainly driven by low base effect and also the implementation of a number of large-scale publicly-financed projects.

“Although we project GDP to grow at a moderate rate of around 2 percent, yet a quarter ago the consensus of growth potential in Russia was 1.5 percent”, added Nordea Bank.

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