EBRD Revises Upward Economic Growth Estimates In Post-Soviet Space

The European Bank for Reconstruction and Development (EBRD) published a report, according to which the Russian economy will grow by at least 1.5% in 2023 and by another 1% in 2024. Compared to the EBRD’s May estimates (-1.5%), the “promotion” of the Russian economy amounted to 3 percentage points.

EBRD is an international financial institution (IFI) and a Multilateral Development Bank (MDB). The EBRD was created in 1991 to promote the transition to a market economy system and the development of private and entrepreneurial initiative in Eastern Europe, Russia, and other republics of the former Soviet Union.

Overall, analysts at the international institute write, “the economies of the countries, where the EBRD operates, should grow by 2.4% in 2023, which is better than the May forecast of 2.2%.” This will happen primarily thanks to the economies of Central Asia, which are benefiting from the new economic and trade situation created by Western sanctions against Russia.

In turn, the acceleration of the Russian economy “during war and sanctions” is supposedly facilitated primarily by “high oil prices.” In other words, the so-called “oil price ceiling” established by Western sanctions had little impact on the Russian economy. This happened because Moscow very quickly strengthened trade ties with non-aligned countries, redirecting its exports, especially of hydrocarbons, to China, India, the countries of Southeast Asia, as well as Central Asia.

Finally, EBRD experts have not changed their expectations for Ukraine, still forecasting growth of 1% this year and 3% in 2024.