The World Bank and IMF forecasts for Russia diverge somewhat

Author: Klaus Dormann The World Bank and the International Monetary Fund published new forecasts for the development of the global economy at their joint spring meeting last week. In mid-January, the two international economic organizations were in full agreement that the Russian economy would achieve growth of 0.8% in 2026, accelerating to 1.0% in 2027. However, the IMF and the World Bank apparently have slightly different assessments of the impact of the sharp rise in energy prices on the Russian economy. The IMF probably sees Russia more as a "beneficiary" of the rise in energy prices. In any case, it raised its January forecast for Russia's economic growth this year from 0.8% to 1.1%. The World Bank, on the other hand, maintained its growth forecast for the Russian economy in 2026, which was lowered to 0.8% in January. And next year, the World Bank expects Russia's economic growth to slow even further to 0.7%. The IMF, on the other hand, expects the Russian economy to grow by 1.1% again in 2027. Current growth forecasts for Russia at a glance The difference between the IMF and World Bank growth forecasts for 2026 is small at 0.3 percentage points. At 1.1% and 0.8% respectively, the IMF and World Bank forecasts are roughly in the middle of the range of 0.5% to 1.5% that the Russian central bank stated in February for this year's growth in the Russian economy. Next Friday, the central bank will probably stick to this growth forecast when it updates its "Medium-term economic forecasts" on the occasion of its key interest rate decision. At any rate, this is supported by the results of the analyst survey that the central bank conducted again in preparation for the key interest rate decision. The survey revealed that the average of around 30 participants continues to expect the Russian economy to grow by 1.0% in 2026, as it did in 2025. GDP forecasts for Russia 2024 to 2027Change in real gross domestic product compared to the previous year in percent World Bank: Russia's growth will fall slightly further in 2026 and 2027 The World Bank has published an update of its "Macro Poverty Outlook" for the Russian Federation on its "Poverty and Inequality Platform (PIP)". In this "Country Report", it analyzes the development of the economy in Russia in more detail than in its "Europe and Central Asia Economic Update“ . The following excerpt from a table shows that the World Bank only expects economic growth of 0.7 to 0.8 percent per year in Russia in the years 2026 to 2028. World Bank: Use of real gross domestic product in Russia World Bank; Poverty and Inequality Platform (PIP):Country Profile: Russian Federation; Macro Poverty Outlook Russian Federation; 07.04.26 The World Bank summarizes its forecasts for Russia as follows: The forecasts are subject to considerable uncertainty. They assume a "temporary disruption" to the global energy supply. On average for 2026, prices for Brent crude oil are expected to rise by 36%, for natural gas by 67% and for fertilizers by 20%. Growth in real gross domestic product is likely to slow to 0.8% in 2026. As a result of the restrictive monetary policy and higher VAT rates, the increase in consumption will slow. Fiscal growth incentives are expected to be "limited". The budget deficit is expected to narrow in 2026 thanks to higher revenues from the rise in energy prices due to the conflict in the Middle East and then gradually increase to around 3.4% of GDP in 2027-2028. Average economic growth of 0.7% is forecast for 2027 and 2028. Demand pressure will ease due to the expected continuation of restrictive monetary policy. The opportunities for fiscal growth stimuli are likely to decrease further with lower energy prices. The increase in VAT is expected to further dampen consumption. However, as the following figure shows, economic growth will be driven by the increase in private consumption (blue parts of the column) and government consumption (dark brown parts of the column) over the entire period from 2026 to 2028. By contrast, the change in gross fixed capital formation (dark blue parts of the column) and net exports (pink parts of the column) will slow down GDP growth. Real economic growth in percent compared to the previous year (purple line), growth contributions of the areas of use in percentage points World Bank: Macro Poverty Outlook Russian Federation; 07.04.26 The rate of decline in the inflation rate is likely to slow down in 2026 due to the expected strong inflationary impetus from abroad. In the medium term, however, the rise in consumer prices will fall and the central bank's inflation target of 4% is expected to be reached in 2028. The price-driving external factors will gradually disappear. The current account surplus is expected to rise to 2.6% of GDP in 2026 thanks to higher energy prices (see purple line in the figure below). In the years 2027-2028, it is likely to decrease again due to falling energy prices. Foreign trade development: current account balance and foreign tradeblue columns: Exports; year-on-year change in percent; left-hand scalegrey columns: imports, year-on-year change in percent; left-hand scale purple line: current account balance as a percentage of GDP; right-hand scale World Bank: Macro Poverty Outlook Russian Federation; 07.04.26 IMF: Russia's growth accelerates to 1.1 percent in 2026 Unlike the World Bank, the IMF did not lower its forecast for this year's growth of the Russian economy last week, but raised it from 0.8 to 1.1 percent (see Ostwirtschaft.de). On Friday, the research institute of the state development company VEB.RF reported on the new IMF forecast, summarizing it among other things: The IMF has revised its forecast for global economic growth in 2026 downwards due to the conflict in the Middle East. However, it has raised its expectations for Russia's growth in light of rising energy prices. In the event of a rapid end to the military conflict and a normalization of the oil market by the middle of the year, the IMF predicts that global economic growth will be will amount to 3.1% in 2026 (-0.2 percentage points compared to the January forecast, see first line in the following table from the VEB Institute). The forecasts for this year's growth in most major economies and communities of states have been lowered (USA: -0.1 percentage points; eurozone: -0.2; UK: -0.5; Canada: -0.1; China: -0.1 percentage points). By contrast, the forecasts for Russia and Brazil were raised significantly (by 0.3 percentage points in each case). IMF GDP forecasts by countryReal gross domestic product, year-on-year growth in %; changes in GDP forecasts compared to the January forecasts in percentage points Institute of the State Development Corporation VEB.RF:World Economy and Markets, April 10 to April 16, 2026; 17.04.26 The IMF's oil price forecast for 2026 has been revised upwards due to transportation and production disruptions. The IMF now assumes that the oil price (arithmetic mean of Brent, WTI and Dubai) will rise by 21% year-on-year to USD 82 (see also russland.capital). OPEC Secretariat: Russia's growth even picks up to 1.3% in 2026 In its "Monthly Oil Market Report" published in mid-April, the Vienna OPEC Secretariat expects Russia's economic growth to accelerate to 1.3% in 2026. This growth rate was also previously forecast by the Russian government. However, Economy Minister Reshetnikov announced that the forecast is likely to be lowered in April. The OPEC Secretariat summarizes the current economic development in Russia as follows: After moderate growth of 1.0 percent in 2025, growth is expected to accelerate slightly to 1.3 percent in 2026. In view of the current rise in commodity prices, the Russian economy appears to be "well positioned" and the rise in global commodity prices will only have a moderate impact on inflation due to Russia's extensive "self-sufficiency" and the government's ability to impose export restrictions to curb domestic prices. The rise in commodity prices could give the government the opportunity to adjust its budget policy accordingly. It will revise this year's budget planning based on a new macroeconomic forecast, which it will publish in the coming weeks. Growth in the Russian economy in 2026 is also likely to be supported by a further easing of monetary policy and continued stable domestic demand. At the same time, however, "structural impediments" - including persistent labor shortages, capacity constraints and continued high borrowing costs - are expected to continue to weigh on Russia's growth prospects.Consumption is likely to be the main growth driver, supported by continued real wage growth and an associated recovery in private lending.With rising commodity prices, the outlook for fixed asset investment, particularly in the area of raw material extraction, has also improved.Net exports are likely to make a positive contribution to growth in 2026 and 2027.Consumer price inflation should continue to weaken. A gradual slowdown in domestic demand is likely to dampen price trends this year. The inflation rate is likely to fall below 5% in the second half of 2026.The central bank lowered the key interest rate by a further 50 basis points in March, supported by easing inflationary pressure. The central bank is expected to maintain the pace of interest rate cuts in April and possibly beyond. Results of the central bank survey for inflation, key interest rate and growth In the run-up to its next key interest rate decision on April 24, the Russian central bank again conducted a survey of analysts from April 10 to 14 (Survey Calendar). The following table shows an excerpt of the results of this survey. For the year 2026, the approximately 30 participants expect the following development of the increase in consumer prices, the key interest rate and the growth of real gross domestic product: At 5.5%, the annual increase in the consumer price index in December 2026 will be barely lower than a year earlier. In December 2025, the annual inflation rate has already fallen to 5.6%. At the end of 2024, it had still reached 9.5%. The annual average inflation rate will fall to just 5.6% in 2026. At an annual average of 8.7% in 2025, it was still slightly higher than in 2024 (+8.4%). At an annual average of 14.1%, the key interest rate will be a good 5 percentage points lower this year than in 2025 (19.2%). Annual economic growth will only reach 1.0% in 2026 – as in 2025. Results of the central bank survey from 10.04. to 14.04.2026 (results of the March survey in brackets) Central Bank of Russia: Macroeconomic survey of the Bank of Russia, 15.04.26 (excerpt) Analysts expect a slower decline in inflation than before The following chart shows the expected development of the inflation rate according to the analyst survey. The inflation rate of 4.0% targeted by the central bank will not be reached until the end of 2028 (dark red line) according to the average of the survey participants' estimates. According to the survey, consumer prices will still rise by 5.5% in December 2026 compared to the same month in the previous year. According to the survey, the inflation target will still be significantly exceeded at the end of 2027 with a price increase of 4.4%. Compared to the results of the central bank survey from March (see bracketed data in the table), analysts' inflation expectations for December 2026 have increased from 5.3% to 5.5%. The average inflation forecast for December 2027 rose from 4.1% to 4.4%. Consumer price index increase in December compared to December of the previous year in % Central Bank of Russia: Macroeconomic survey of the Bank of Russia, 15.04.26 Skeptical growth forecast for 2026: GDP increases by only 1.0 percent The survey participants' expectations for economic growth have hardly changed since the December survey. With a GDP increase of 1.0% in 2026, they continue to expect growth to be just as low as in 2025. The analysts therefore apparently do not expect the sharp rise in energy prices to accelerate economic growth, but at best to stabilize it.  They do expect GDP growth to pick up to 1.5% in 2027 and 1.8% in 2028. However, the analysts' growth forecasts from 2027 onwards remain far below the government's previous forecasts, which anticipate growth rates of 2.8% and 2.5% in their 2027 and 2028 budget plans. Real gross domestic product change compared to previous year in percent Central Bank of Russia: Macroeconomic survey of the Bank of Russia, 15.04.26 President Putin is not spreading "growth optimism" either In an introductory speech to consultations with members of the government on the development of the Russian economy on April 15, President Putin focused on the current decline in overall economic production in the first two months (en.kremlin.ru). He stated: "Overall, GDP fell by 1.8% in January and February. Manufacturing and industrial production as a whole suffered production losses, as did such an essential sector as construction." Putin once again pointed out that the weather conditions contributed to the slowdown in economic growth in the two winter months. In addition, this year January had two working days and February one working day less than in 2025. However, the President emphasized at the same time: "I am expecting detailed reports today on the current economic situation and why the development of macroeconomic indicators is currently lagging behind expectations. Economic development is not only lagging behind the expectations of experts and analysts, but also behind the forecasts of the government and the Central Bank of Russia." He expects proposals on what additional measures need to be taken to ensure the growth of the Russian economy (russland.capital with video with German translation of Putin's speech; Die Presse, Berliner Zeitung+; Vedomosti; BBC video: Rosenberg press review). Kremlin spokesman Dmitry Peskov reported the next day that the non-public part of the meeting had lasted several hours. Numerous proposals had been made to stimulate the economy. However, Peskov declined to give details, according to a Reuters report. The participants included Prime Minister Mikhail Mishustin, Deputy Kremlin Chief of Staff Maxim Oreshkin, First Deputy Prime Minister Denis Manturov, Deputy Prime Minister Alexander Novak, Central Bank Governor Elvira Nabiullina and PSB Bank CEO Pyotr Fradkov. Many experts expect GDP in the first quarter to be lower than a year ago Vedomosti asked a number of well-known analysts about the expected development of overall economic production in the first and second quarters. In the first quarter of 2026, they expect a year-on-year decline in real gross domestic product of 0.5 to 1.5 percent or an approximate stagnation of overall economic production. Alexander Shirov, Director of the Institute for Economic Forecasting at the Russian Academy of Sciences, is particularly skeptical about the current growth trend. He believes that the "economic slowdown" has affected more and more Russian companies and is triggering a "domino effect". The pent-up demand could support production development. However, Shirov assumes that this would only be possible if the key interest rate were lowered faster than is currently the case. He expects overall economic production to fall by 1 % to 1.5 % in the first quarter. For the second quarter, he is only forecasting "zero growth". According to Yegor Susin, Head of the Center for Market Strategies at Gazprombank, economic growth is falling short of forecasts not only due to one-off calendar effects, but also due to tax increases. The effect of the increased budget spending at the beginning of the year will only become apparent in the second half of the year. At the same time, Susin notes that there will be three more working days in the second quarter. He sees no risk of recession. Rising prices for Russia's exports will provide additional support for production development in the second quarter. Shirov also expects foreign trade revenues to grow in April and May. Marina Voitenco: Economic activity is currently "below freezing" In her latest weekly report, Marina Voitenco, the long-standing "economic policy observer" of the Russian website Politcom.ru, provides the following overview of her assessment of current economic developments: "After a GDP decline of 1.8% in January and February, most experts expect negative GDP development in the first quarter with declines of between 0.8% and 1.5%. Only a few estimates predict growth close to zero or a slight increase (up to 0.2% to 0.4%). Investments are likely to fall further... . The situation will gradually improve in the second quarter thanks to exports (mainly due to rising energy and fertilizer prices). Nevertheless, uncertainty regarding the outlook for global economic development remains extremely high. The timing of an end to the conflict in the Middle East is uncertain. There are still risks of escalation and a deterioration in international trade and the global economy as a whole. … The current forecast growth rate for Russian GDP in 2026 averages around 1%. However, the proportion of forecasts close to zero is also increasing. The actual growth rate this year will largely depend on the coordinated efforts of the government and monetary authorities to reduce price growth to around 5% year-on-year and create the conditions for investments to increase labor productivity." Finance Minister Siluanov: The deficit in the federal budget will soon disappear At the Moscow Stock Exchange Forum on April 16, Russian Finance Minister Anton Siluanov commented on the development of the federal budget in a round table discussion with Economics Minister Reshetnikov and Central Bank President Nabiullina. He demonstrated confidence: there was no need to worry about the current budget deficit as it was foreseeable. Because oil and gas revenues had fallen in the first quarter, overall revenues had fallen slightly in the first quarter. Everyone is aware of the current trend in energy prices. The deficit in the federal budget will be balanced within a year. Regarding the development of the rouble exchange rate, Silunaov noted that the exchange rate would be stronger for several years "than many would like". A strong exchange rate represents a "structural challenge" for the Russian economy. In order to overcome this, flexibility in the labor market and in the management of insolvencies is required. Central Bank President Nabiulla pointed out that for the first time in the history of modern Russia there is a labor shortage (Berliner Zeitung). The central bank's forecast that the inflation rate will fall to between 4.5 and 5.5 at the end of 2026 takes into account a temporary rise in inflation at the beginning of 2026. The Russian central bank is not aiming to reduce the inflation rate to 4 percent at all costs (Vedomosti.ru). Reading tips: War, energy supply, energy prices and Russia: t-online.de; Analysis by Patrick Diekmann: War in Ukraine. Putin's Russia is bleeding to death, 17.04.26 Die Presse+; Interview by Eduard Steiner with Vladislav Inozemcev: "If the West wants a regime change in Russia, it must lift sanctions", Inozemcev explains, among other things, why the billions in revenue from the high oil price are of little help to Russia, 17.04.26; Euromaidan Press Interview by Peeter Helme: Vladislav Inozemtsev: A collapse is not imminent. Inozemtsev on oil windfalls, Ukrainian strikes, and why the war will be won on the ground, 10.04.26 "Die Presse" podcast on the Russian economy: Oil and gas price shock. Will Europe soon have to buy from Russia again? Eduard Steiner and Russia economist Vasily Astrov (WIIW) in conversation with international energy consultant Johannes Benigni, 15.04.26 Phoenix-Runde: Trump's naval blockade - debacle for the whole world, Anke Plättner discusses with: Hartwig Ross, expert on maritime security; Bente Scheller, Heinrich Böll Foundation; Prof. Rüdiger Bachmann, German-American economist; Reza Asghari, CDU member of the Bundestag,15.04.26 Markus Lanz: Energy crisis: Does the government have no plan? DIW energy expert Prof. Claudia Kemfert criticizes the German government for acting with short-term, non-targeted measures. Journalist Michael Bröcker, editor-in-chief of "Table Briefings", agrees; 15.04.26 Inosmi.ru;: Hungary's new prime minister will have a hard time saying "no" to Russian oil and gas, original article: Sohu, China, 13.04.26 . Berliner Zeitung, Flynn Jacobs: EU buys more Russian LNG - now Eni boss calls for sanctions to be postponed.because of the Hormuz crisis, the Eni boss calls for the LNG ban against Russia to be postponed from 2027, 13.04.26; see also Inosmi.ru, 14.04.26 Forbes.ru; Elena Khudaeva: Analysts have studied the impact of the war in Iran on Russia's economic growth, 13.04.26 Kommersant; Artem Chugunov: Analysts study the Strait of Hormuz. The war in the Middle East is beginning to have an impact on macroeconomic forecasts for Russia.12.04.26 Natalia Asedova, Finam.ru: On the brink of a serious crisis. What are the consequences of the blockade of the Strait of Hormuz? 13.04.26 Fiscal policy; national budget and oil prices: BondGuide; Alexander Kolyandr and Alexandra Prokopenko (THE BELL): Russia doesn't waste time on high oil prices: but spending still outruns revenue, 04/17/2016 Focus.de; Lars-Eric Nievelstein: Russia's budget deficit hits annual target after only three months. Russia's economy is under pressure. Revenues are weakening enormously. 17.04.26 Politkom.ru; Marina Voitenko: Budget deficit with downward macrodynamics, 16.04.26 Finam.ru; Olga Belenkaya: The planned annual budget deficit has already been exceeded, 09.04.26 Overall economic development: Interfax.com: Russian economy's reserves are largely depleted, macroeconomic situation is more difficult than in recent years - Reshetnikov, 17.04.26 LIGA.net news editor Vira Kasiyan: Russia admits that the economy's reserves are "almost exhausted". The Minister of Economic Development of the Russian Federation stated that the macroeconomic situation is much more difficult than in previous years, 17.04.26 Global Banking & Finance Review®: Top Officials Have Offered Putin Ideas for Economic Growth After Contraction, Kremlin Says, 17.04.26; Reuters; Guy Faulconbridge, Dmitry Antonov and Elena Fabrichnaya: Russia looks for a way out of its sharpest economic contraction in three years, 16.04.26 Berliner Zeitung, Liudmila Kotlyarova: Central Bank sounds the alarm: Russia faces labor shortage "for the first time". Ukraine invasion exacerbates labor shortage: Central bank chief Nabiullina sees Russia's economy at its limit - despite high energy revenues, 16.04.26 The Moscow Times: Putin Demands Answers as Russia's Economy Undershoots Expectations, 15.04. The Moscow Times; Vasily Burov, consulting firm Estonto Lab; Andrei Yakovlev, Davis Center at Harvard University: Ending the war in Ukraine will not restore Russia's economy,15.04.26 Vedomosti; Ksenia Kotchenko: Putin ordered an explanation for the discrepancy between government forecasts and GDP data. Experts see the reasons not only in calendar and seasonal factors, 16.04.26 Vedomosti; Valeria Khlobystova: What Nabiullina, Reshetnikov and Siluanov said at the stock exchange forum about the budget, the interest rate and the IPO of public companies. The Finance Minister assured that the budget deficit would be balanced within a year,16.04.26 MK.RU; Vladimir Chuprin: Russia's economy ranks fourth in the world: Is this good or bad? Interview on Russia's economic growth with Igor Nikolaev, Institute of Economics of the Russian Academy of Sciences,16.04.26 Vedomosti: Russia remains the fourth largest economy in the world in terms of purchasing power parity (PPP), 16.04.26; Ntv.ru: Russia retains fourth place worldwide in terms of GDP, 16.04.26 russia.capital: Putin calls for measures against slowing economic growth, 16.04.26; with video (with German translation): Putin held a meeting on economic issues, 15.04.26 Vedomosti.ru: Putin: The economy has shrunk more than predicted by the government and the central bank. The president called for measures to stimulate growth,15.04.26; Regnum.ru: Putin reported a 1.8 % decline in Russian GDP over the last two months. 15.04.26 Die Presse: Russia's state budget. "I expect proposals": Russia's economic slump puts Putin under pressure, 15.04.26 Alexandra Prokopenko in an interview with Tagesanzeiger.ch; Clara Lipkowski: War in Iran: Alexandra Prokopenko on Russia's economy, 15.04.26 nd-aktuell.de; Hermannus Pfeiffer: Russia in the shadow of sanctions. Thanks to boosted domestic demand, Russia's economy is surprisingly stable after four years of war, helped by the rising oil price. 14.04.26 Monocle.ru; Charts: The GDP index has returned to the level of a year ago. Export prices for Russian raw materials rose by 41% in March. The budget deficit is growing faster than in previous years, 13.04.26 Alexander Shirov, Director IEF-RAS: „Economy of chance“. What opportunities are opening up for Russia as a result of global changes? Vedomosti from April 13, 2026 Forecasts: Bank of Russia: Macroeconomic survey of the Bank of Russia, 15.04.26 International Monetary Fund: World Economic Outlook; Global Economy in the Shadow of War, 14.04.26 Ostwirtschaft.de: IMF raises Russia forecast,16.04.26 russland.capital: Rising commodity prices: IMF raises forecast for Russian GDP growth,15.04.26 Der Standard, András Szigetvari: IMF forecast. How Trump's war against Iran is making Russia richer and Europe poorer, 14.04.26 Die Zeit: International Monetary Fund: IMF lowers forecasts for Germany and the global economy, 14.04.26 Finmarket.ru: The IMF has lowered its forecast for global GDP growth in 2026 to 3.1 %.14.04.26 Interfax.ru: The IMF has lowered its forecast for global GDP growth in 2026 due to the Iran conflict.14.04.26 Kommersant, Artem Chugunov: Experts believe that the risk of recession is low. Quarterly GDP growth rates in 2025 have been revised by Rosstat: 14.04.26 Eurasian Fund for Stabilization and Development, Astana: EFSD Regional Economic Outlook Spring 2026, 09.04.26 IEF RAS: Analysis of short-term GDP dynamics: April 2026, 08.04.26 World Bank: Europe and Central Asia Economic Update – April 2026, Summary, 08.04.26 World Bank; Poverty and inequality platform: Country Profile: Russian Federation;Macro Poverty Outlook Russian Federation; 07.04.26 The post World Bank and IMF forecasts for Russia diverge slightly appeared first on ostwirtschaft.de.