Russia’s economy will contract by 1.9 percent in 2016 followed by growth of 1.1 percent next year, the World Bank said on Wednesday, cutting its forecasts to factor in a weaker global oil price.
The international lender had forecast in December that Russia’s economy would contract by 0.7 percent in 2016 and grow by 1.3 percent in 2017.
Previously it had seen oil prices averaging $49 a barrel in 2016 whereas for its latest forecast it used a price of $37 a barrel.
The World Bank said in its latest Russia economic report the projected increase in poverty in Russia in 2016 would be the largest since the 1998-99 crisis, eclipsing the pain from the 2008 global financial crisis.
It added that Russia was unlikely to meet its budget deficit target of 3 percent of GDP in 2016 and that no serious structural reforms were expected before the 2018 presidential election.