The World Bank has raised its forecast for Russia's economic growth this year to 4%.

     According to the TAS news agency, the World Bank predicted Russia's growth rate this year at 4.3% in its economic report for Europe and Central Asia released on the 6th (local time), which is significantly higher than the 3.2% forecast in May. This is an increase of 1.1 percentage points.

The World Bank cited faster-than-expected domestic demand and rising energy prices, Russia's main export item, as reasons for the upward revision of the growth rate.

    In addition, it was analyzed that the Russian government's fiscal support policies are also having a positive effect on the growth rate increase to a certain extent.

    The World Bank instead downgraded its growth forecast for Russia in 2022 and 2023 to 2.8% and 1.8%, respectively, from 3.2% and 2.3%.

    It is predicted that the growth rate will gradually slow down due to the stabilization of demand and lower prices of production goods such as energy.

    The U.S. sanctions against Russia introduced this year, low COVID-19 vaccination rates, and the central bank's rate hike are also expected to negatively affect growth.

    The Central Bank of Russia raised the key interest rate by 0.25 percentage points to 6.75% in mid-March. It is a measure to reduce the rate of consumer price increase, and it is the fifth consecutive increase since March.

    The completion rate of vaccination in Russia, which started full-scale vaccination against COVID-19 using its own vaccine in January, is still hovering around 29%.

    Meanwhile, another international credit rating agency, Standard & Poor's (S&P), also raised its forecast for Russia's growth this year to 4% at the end of last month from 3.7% in June.

    The forecast for 2022 has been raised from 2.5% to 2.6%, with growth expected to reach 2% in 2023 and 2024, respectively.

    Russia's Ministry of Economic Development also raised the country's growth rate for this year to 4.2% last month, from 3.8% projected in July.

    Instead, the forecast for 2022 was lowered to 3% from 3.2%, and the forecast for 2023-2024 was maintained at 3%.

    The Central Bank of Russia expects growth of 4 to 4.5 percent this year and 2-3 percent in 2022-2024.

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