EBRD Revises Russian Economy 2015 Forecast, Expects GDP to Decrease by 0.2%

MOSCOW, September 18 (RIA Novosti) - The European Bank for Reconstruction and Development (EBRD) has revised the Russian economy growth forecast for 2015, expecting the GDP to decline by 0.2 percent instead of the earlier predicted 0.6 percent growth, according to the bank's press release.

The bank expects the economy to stagnate in 2014, with zero GDP growth attributable to the sanctions introduced against Russian banks and companies.

"We are revising the 2015 growth forecast to a mild contraction of -0.2 per cent, as sanctions take effect, while fiscal room is limited and high capacity utilisation limits the long term effects from any fiscal or monetary stimuli," the bank said.

In the medium term, a resolution of the geopolitical crisis would be required for the Russian economy to grow.

"Recovery after the potential lifting of the sanctions will be protracted as investor confidence and business relationships will have to be rebuilt," the bank noted.

As for the long-term forecast, according to EBRD Russia will need to continue improving the business climate at both a federal and a regional level. It will help attract technologies, improve productivity and reduce dependence on commodities.

The Russian Ministry of Economic Development predicts a GDP growth of 1.2 percent in 2015, while the Bank of Russia expects the country's economy to grow by 0.9-1.1 percent next year.