AKIPRESS.COM - The European Bank for Reconstruction and Development (EBRD) has revised up sharply its 2017 economic growth forecasts, with higher export levels, a revival in investment and firmer commodity prices supporting a broad-based upswing.
Average growth across the EBRD region is seen at 3.3 per cent this year, a rise of 0.9 percentage points against the previous forecast from May, and compared with growth of just 1.9 per cent in 2016.
The EBRD tracks the economies of 37 emerging countries, where it finances projects and supports reforms that promote sustainable and environmentally-friendly market economies.
The economy in Russia, the largest in the EBRD region and a major influence on output in many other EBRD countries of operations, has now pulled out of recession after a cumulative contraction of 3 per cent over the last two years. Russia is expected to see GDP growth of 1.8 and 1.7 per cent in 2017 and 2018, respectively.
The increase in the oil price – compared with 2016 – has been a positive factor for Russia, and also for other commodity exporters and countries in Central Asia and eastern Europe and the Caucasus that rely on Russia for remittance flows or as a destination for their exports.
The gap in growth rates between the east and west of the EBRD region was now expected to narrow further, it added.
However, the report says that investment activity in Russia is constrained by economic uncertainty, and signs of stress have appeared in the financial sector.