State production cushions slump in Russian economy

Riga In view of the high energy prices and government demand, the slump in the Russian economy this year will probably be less severe than initially forecast by institutes. Researchers at the Vienna Institute for International Economic Comparisons (WIIW), for example, corrected their expectations significantly in the autumn forecast presented on Wednesday.

In the summer they had assumed that economic output would fall by 7.0 percent in the current year. Now the experts only expect a decline of 3.5 percent. However, you still see major challenges for the Russian economy.

According to the institute, the economy is “heading for another recession” in the coming year. WIIW director Mario Holzner calls the long-term growth prospects for Russia “extremely subdued”.