S&P downgraded the Outlook on Russia’s economy in 2016

In 2016 the Russian economy will continue to decline, should of updated projections for the Standard & Poor’s. According to experts of Agency, this year Russia’s GDP will shrink by another 1.3%, whereas previously it was expected that the economy will be able to recover after the fall of the previous year (-3.7 percent) and will grow by 0.3%.

Simultaneously, the degraded and the growth forecast for the Russian economy in 2017. The fall of the GDP next year, S&P experts still do not expect, however, believe that more than 1% it will not grow. Last fall, experts predicted that in 2017 the GDP growth of 1.8%.

“Updated macroeconomic forecast reflects a significant reduction in our estimates of the prices of raw materials. Now we expect that the average price of a barrel of oil in 2016 will be $40, and in 2017 — $45, whereas previously predicted $55 and $65 per barrel, respectively”, — stated in the forecast the S&P.

The forecast for inflation in 2016, experts, S&P increased to 8.5%, which is 1 percentage point higher than in the previous version of the document. The forecast for 2017 was left unchanged at the level of 5.7%.

Earlier, the international rating Agency Moody’s has worsened the forecast of falling of GDP of Russia in 2016 to 2.5%, the rating Agency Fitch is about 1%, and the European Commission — to 1.2%. Return the Russian economy to growth in the European Commission-expected in 2017, but now, the EC believe that GDP growth will be three times less was 0.3% instead of 1%.

In early February the Bank of Russia has lowered its estimate of the annual rate of decline of Russia’s GDP in January—March 2016, citing negative foreign economic conjuncture and the threat of weakening economic activity.

“The annual rate of decline of GDP in the first quarter of 2016 could reach 1.7 to 2.5%, which is higher than the previous forecast (1-2%)”, — stated in the materials of the Central Bank.