2017年-世界发展银行全球_Russia_Economic_Report_May_2017___From_Recession_to_Recovery_58页_6mb

Russia Economic Report: From Recession to Recovery (May 2017)

Core Content

This report by the World Bank Group provides an analysis of Russia's economic developments, growth prospects, and regional responses to the economic crisis from 2014 to 2017. It highlights the transition from recession to recovery, the role of oil prices, and the structural challenges facing the Russian economy.

Main Views

• Economic Recovery: After nearly two years of recession, Russia began to show signs of recovery in 2016, with GDP growth resuming in the first quarter of 2017.
• Global Growth Trends: Global growth started to strengthen in late 2016, supported by the US, Euro Area, and Japan, while China's growth remained steady despite structural shifts.
• Macroeconomic Stability: Russia's macroeconomic conditions improved, with inflation declining and the central bank adopting a cautious easing approach.
• Fiscal Adjustments: The federal government implemented fiscal consolidation through expenditure cuts and limited revenue mobilization, with the aim of introducing a new fiscal rule by 2020.
• Regional Performance: Russian regions managed the economic slowdown well, with low deficits and moderate debt levels, although local debt structures remain a challenge.
• Productivity Constraints: Russia's long-term growth is constrained by low and declining total factor productivity (TFP), which limits potential output growth and GDP recovery.

Key Information

1. Recent Economic Developments

• Growth: Russia's economy entered a recovery path after two years of recession. In 2016, GDP contracted by 0.2 percent year-on-year (y/y), while in Q1 2017, it grew by 0.5 percent y/y.
• Balance of Payments: Despite external volatility, the balance of payments remained stable, with Russia's external debt decreasing and its 5-year CDS spread narrowing.
• Labor Market: Unemployment was near its historical minimum, and labor force participation was close to maximum levels. However, real incomes continued to decline, slightly increasing the poverty rate.
• Monetary Policy: The Central Bank of Russia (CBR) gradually eased monetary policy, with the key interest rate cut and inflation expectations falling, although still elevated.
• Financial Sector: The banking system stabilized, but credit growth remained stalled. Nonperforming loans (NPLs) were still high, and SME loans experienced the sharpest decline.
• Government Budget: The federal fiscal deficit widened in 2016 but remained contained. Primary expenditures decreased in real terms, and the government froze civil servant salaries and pension savings.

2. Outlook for Three Years: Growth Prospects Are Modest

• Growth Projections: The Russian economy is expected to grow at a modest rate of 1.3 to 1.4 percent in 2017–2019.
• Sectoral Contributions: Growth is projected to be broad-based, with both tradable and non-tradable sectors contributing, although net exports may have a negative impact in 2017 due to stronger import growth.
• Fiscal Framework: The introduction of a new fiscal rule is expected to improve economic predictability, with a focus on expenditure consolidation and limited revenue mobilization.
• Oil Price Sensitivity: Growth projections remain sensitive to oil prices. A 15% drop in oil prices could reduce growth to 1.0% in 2017 and 1.2% in 2018–2019, while a 15% increase could raise it to 1.6% and 1.8% respectively.
• Consumption and Investment: Private consumption is expected to drive growth, with a projected increase of 1.8% in 2017 and 2.5% in 2018–2019. Investment demand is also expected to rise due to macroeconomic stability and improved investor sentiment.

3. Russian Regions and Their Responses During the Crisis Years

• Regional Fiscal Performance: Subnational governments managed the economic downturn relatively well, with low deficits and moderate debt levels.
• Debt Structure: A significant portion of subnational debt (39%) is in the form of short-term loans, raising rollover risks. Some local governments are highly indebted.
• Fiscal Adjustments: Regional fiscal adjustments were mainly through expenditure cuts rather than revenue mobilization. Social sectors and capital spending were most affected.
• Fiscal Management: The report emphasizes the need for better debt management and improved public-sector efficiency to unlock growth potential at the subnational level.

Conclusion

Russia's economy has shown signs of recovery from the 2014 recession, driven by improving macroeconomic stability, rising oil prices, and increased domestic demand. However, the recovery is modest, and long-term growth is constrained by low productivity and structural challenges in the financial and regional fiscal systems. The government's fiscal consolidation efforts, including the introduction of a new fiscal rule, are expected to enhance economic predictability, but boosting productivity remains a key challenge for sustainable growth.