Russian GDP may contract by 3.8% this year: World Bank

Moscow

RUSSIA faces a protracted recession as the impact of Western sanctions lingers and oil prices stay low, the World Bank said in a report published on Wednesday. In its baseline scenario, the bank expected Russia's gross domestic product to contract by 3.8 per cent in 2015 and a further 0.3 per cent in 2016, describing medium-term growth prospects as dim.

The World Bank's lead economist for Russia, Birgit Hansl, said "adjustment to the new oil price reality and the sanctions environment" was a key policy challenge. "If we look more into the medium term, the main challenge for Russia is the continued dearth in investment," she said.