MOSCOW, (Reuters) – Russia’s economic recovery is stronger than anticipated this year, but U.S. Sanctions, a poor vaccine rate and central bank’s monetary tightening all will impact the outlook for growth, said the World Bank Wednesday.

Russia’s economic recovery will surpass that of Belarus, which was hit hard by Western sanctions during a political crisis. However, it will show less strength than other ex-Soviet republics like Georgia, Armenia and Uzbekistan.

The Russian economy contracted by 3.3% in 2020. This was its largest contraction in 11 year. However, it is now back to pre-pandemic levels. It will lose momentum over the coming years without additional investment from the state.

According to the World Bank’s forecasts in June, Russia’s gross domestic products will increase by 4.3% in 2021, 2.8% in 2022 and 3.2% in 2030, respectively.

The World Bank stated in its report on Europe/Central Asia that the economic recovery in the previous year “is supporting the economy” and highlighted the high energy prices and higher domestic demand.

According to it, the economic growth of 2022 will be slower as demand stabilizes, and industrial commodity prices may go down.

“The growth outlook has been affected by an escalation in geopolitical tensions including U.S. additional sanctions in 2021 and low vaccination rates. Also, the policy rate is rising from historic lows.

Russia’s rate hikes have been five-fold this year. The country is struggling to contain stubbornly high consumer prices. Russia will likely raise the key rate 25 basis points, or 6.75%, on October 22.

CIS, CENTRAL ASIA

Russia’s expected economic growth in this year is lower than the 4.3% that the World Bank anticipates for Central Asia in 2021-2022. This is due to the lack of investment and rate increases prompted by higher inflation.

Kazakhstan, the largest economy in the region, has a 3.5% growth rate this year and 3.7% next.

The World Bank stated that “the medium-to-long-term outlook for Central Asia could be affected by stability concerns in neighboring countries including Afghanistan amid increased security risks and uncertainty concerning the influx of migrants refugees.”

Among other CIS nations, Georgia posted 8.0% annual growth, closely followed by Moldova (6.8%) and Armenia (6.1%).

Global body warned that the continued COVID-19 pandemic, with low vaccination rates in certain countries and high vaccine reluctance from others poses risks to forecasts.

These forecasts were updated by the World Bank:

Here’s a graph of the World Bank’s economic forecasts

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