World Bank lowers Russian GDP forecast for 2012

The World Bank Monday downgraded its forecast of Russia's gross domestic product (GDP) for 2012 from 3.8 percent to 3.5 percent. In June, the World Bank upgraded its forecast of Russia's growth from 3.5 percent to 3.8 percent. Now the bank returned to its previous prediction, which was the same with that made by the Russian Ministry of Economic Development in August. The World Bank cited Russia's lower-than-expected harvest, weakening domestic demand and worsening global economic outlook as reasons for its downgrading. "In the second half of 2012 the growth of economy could slow due to negative base effect, hike of inflation rate, drought and low activity on the global markets," the bank said in its regular report.Russia's GDP grew 4.4 percent in the first half of 2012. The GDP growth in Russia this year will be the most rickety in 15 years, excluding two recessionary years of 1998 and 2009. "It is expected that the growth pace of Russian economy will be slow during the next year," the bank said. According to the report, Russian GDP in 2013 would be 3.6 percent. The Russian Economic Development Ministry predicts next year's GDP growth of 3.7 percent, providing oil prices not to sink below 97 U.S. dollars per barrel. This is still higher than the average global growth rate in 2013 forecast at 2.5 percent by the World Bank. Russia's GDP expanded by 4.2 percent in 2011, making the country the third fastest growing major economy only behind China and India.