06:45 GMT15 July 2020
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    WASHINGTON (Sputnik) - The World Bank lowered its forecast for Russia's annual gross domestic product (GDP) growth for 2019 from 1.4 percent to 1.2 percent due to a decline in oil production, a new report revealed.

    "In Russia, the projection for 2019 has been downgraded to 1.2 percent, reflecting oil production cuts", the report stated. "Tighter monetary policy, combined with a value-added tax hike at the beginning of 2019, are also contributing to weaker growth momentum in the remainder of 2019".

    READ MORE: Moody’s: Oil Prices Effect on Russia Slowed Returning to Investment Grade Rating

    In its January report, the World Bank projected Russia's economy would grow by 1.5 percent before lowering its forecast to 1.4 percent in April.

    The forecast for Russian GDP growth for 2020 and 2021 remained, unchanged with the World Bank expecting a rate increase of 1.8 per cent, however, noting that growth of private investment will remain sluggish.

    On Monday, Russian Minister of Energy Alexander Novak said that in line with the OPEC + agreement, average daily reductions in Russia's oil production in May amounted to 317,000 barrels per day compared to production levels in October 2018,  taken as guidelines in the agreement.

    Moscow intends to fully comply with agreed production levels In June.

    READ MORE: Chinese Venture Capital Could Play Key Role in Growth of Russia AI Start-Ups

    According to the report, Russian economic growth accelerated to a six-year high of 2.3 per cent in 2018,  despite tightened economic sanctions and pressure on financial markets.

    The report found that acceleration was supported by increased oil prices, solid contributions from net exports, energy-related construction projects, and hosting the World Cup.


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    GDP, forecast, growth, World Bank, Russia
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