"Moody's projects that Russia, the largest economy by far among the nine countries, will record positive, albeit modest, real GDP growth of 1.0% in 2017 after two years of recession. This upturn will lift the broader region due to trade and financial linkages. Only Belarus is expected to shrink again in 2017," the agency said in a statement following the release of its outlook for the Commonwealth of Independent States (CIS).
Geopolitical conflicts will nevertheless continue to exert pressure on the Russian economy and the economy of neighboring CIS states, the statement added, noting that armed conflict, such as the violence in Azerbaijan's breakaway region of Nagorno-Karabakh and the war in east Ukraine, will continue to undermine the economies of most CIS states except Belarus and Kazakhstan.
While the CIS, including Russia, is still associated with a negative outlook, Russia's economic turnaround will pull the entire region closer to recovery territory, according to Moody's.
Russia has been hit by a downturn that began in early 2015 after falling oil prices and Western anti-Russia sanctions took bite. The country's GDP fell 3.7 percent in 2015, according to the Russian Federal Statistics Service Rosstat.
The latest Economic Development Ministry estimate 2016 growth expectations stands at —0.5 percent, upward the previous forecast of —0.6 percent. The ministry's 2017 baseline scenario forecast is a GDP increase of 0.6 percent. Growth is expected to further recover in the subsequent years, growing 1.7 percent in 2018 and 2.1 percent in 2019.
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