Economic development forecast globally and in Eastern Europe in 2013 and 2014

EBRD forecast on economic development in Russia, Belarus and Ukraine

The European Bank for Reconstruction and Development published the quarterly economic development forecast for 2013 in Eastern Europe. It should be mentioned that the forecast differs significantly compared to October report.

Thus, in February it was predicted that the GDP of Russia increased from 3.2% to 3.5%. Although the rate of the Russian GDP remained significantly lower than it was before the crisis (more than twice lower).

The EBRD’s report forecasted economic growth in Ukraine by 1%, while in October it suggested a 2.5% growth. The bank commented that the result was called forth by the economic deceleration in Ukraine for the last two quarters of 2012, including output decline in December.

The forecast for Belarus was changed to 1.5% from 2.5% suggested previously.

The IMF lowered the world economic growth forecast in 2013

In the October report by the International Monetary Fund the forecast of the world economic growth was reduced from 3.2% to 2.9% in 2013, whereas in 2014 the world GPD will increase by 3.6%, although it was expected to grow by 3.8%.

The Russia’s GDP should have risen by 1.5 per cent, rather than by 2.5% predicted previously.

The IMF specialists suggest that the US economy will increase by 1.6% in 2013, regardless of the July’s 1.7% forecast. In 2014 the GDP of the United States will increase by 2.6% rather than the 2.8% that were expected in July. The GDP of the Eurozone in 2013 will reduce by 0.4%, but in 2014 the IMF suggests its increase to 1 per cent. China is expected to elevate its GDP by 7.6% in 2013, although it was predicted to increase by 7.8% in July.

As for the reasons of the world economic slowdown, IMF supposes that it takes place due to the following factors: the possible renunciation of the US Federal Reserve System to resort to the quantitative easing, the China’s development slowdown and, consequently, its negative impact on the economics of the countries exporting raw materials to China. Furthermore, the IMF reports relevant challenges in the Eurozone, including extra high levels of debts in several countries that hamper GDP growth.

The IMF regularly publishes reports about current global economic situation and GDP growth forecasts. As a rule, the Fund releases them in April and in September or October. Adjustments are usually added into these data in January and July. IMF’s predictions happen to predict economic growth in European countries, but, in fact, it never happened.