RUSSIA had its growth forecasts slashed by the World Bank yesterday due to ongoing geopolitical tensions coupled with a lack of reform.
The World Bank forecast 0.3 per cent growth in 2015 and 0.4 per cent in 2016, revised down from 1.5 per cent and 2.2 per cent respectively.
Sanctions imposed in response to Russia’s involvement in the Ukraine crisis have dampened confidence which the World Bank believes will recover only very gradually.
Financial sanctions have caused significant outflows of money from banks while yesterday saw Japan ban the issuance of Russian bank securities on its capital markets.
A lack of competition in Russia’s products markets was another reason. It claimed most markets were dominated by a few incumbent firms that lacked competition and stifled entrepreneurship.