Browsing by Subject "taloudellinen kehitys"

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  • Kudrin, Alexey; Gurvich, Evsey (2015)
    BOFIT Policy Brief 1/2015
    This article first appeared in Russian in the journal Voprosy Ekonomiki No. 12, 2014.
    ​The slowdown of the Russian economy is due to chronic factors and cannot be cured by simple fixes such as relaxing monetary or fiscal policy. The biggest impediment to growth in Russia’s case is the weak market environment, evidenced foremost by the dominance of state-owned enterprises and quasi-government companies. Strong incentives for business and public administration to enhance efficiency are required. The key policy objectives necessary to move Russia away from its current model based on imported growth to a new growth model are laid out in this analysis.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2015)
    BOFIT Forecast for China 1/2015
    Chinese economic growth slowed to just over 7 % p.a. in 2014. This widely expected slowdown in growth also comports with our view on China’s long-term growth prospects. BOFIT sees GDP growth this year remaining near 7 % and then slowing to around 6 % in 2016 and 2017. China’s decades of sustained high growth are now behind us, and maintaining conditions conducive to growth will become ever more elusive and require deliberate progress in reforms. Risks to the economy will rise with slowing growth.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2015)
    BOFIT Forecast for China 2/2015
    As projected in earlier forecasts, Chinese economic growth continues to slow. 2015 GDP growth overall should average around 7 % p.a., and then the growth is expected to fall to around 6 % p.a. in 2016 and 2017. China faces the challenge of creating new engines of growth and managing its existing problems. This calls for determined reforms that inevitably will also bring about various kind of disturbances in the economy. Given decelerating growth and rising indebtedness, the risk that the Chinese economy underperforms this forecast is rising.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2016)
    BOFIT Forecast for China 1/2016
    Economic growth in China continued to slow in 2015, with annual GDP growth coming in at slightly below 7 %. Even with the negative market reactions to lower growth, there is little change in the long-term outlook. The modest slowing trend in growth will continue and China will move ahead with structural adjustments to its economy. As in our earlier forecasts, we expect the Chinese economy to grow at around 6 % p.a. in 2016 and 2017. In 2018, growth will slow to around 5 %. As China’s economy opens up to the world, it faces new risks that require more transparent policy responses. China’s high (and rising) debt-to-GDP ratio makes it increasingly susceptible to severe economic disturbances.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2016)
    BOFIT Forecast for China 2/2016
    ​Growth of the Chinese economy this year has slightly exceeded our expectations, largely due to the government’s stimulus policies. We now expect GDP to grow about 6.5 % p.a. this year. However, China’s growth outlook has not changed. We project growth to slow to 6 % in 2017 and 5 % in 2018, and consider the slowdown as a natural aspect of the China’s economic development. As structural adjustments proceed, the role of consumer demand and services in the economy will become more pronounced. Concerns over economic development have increased, and the possibility of a rapid deceleration in growth during the forecast period cannot be ruled out.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2017)
    BOFIT Forecast for China 1/2017
    Official Chinese figures show that GDP growth was last year 6.7 % p.a., which is slightly less than in 2015. The trend largely follows our forecast from last September. As before, GDP growth is expected to slow to around 6 % this year and around 5 % in 2018 and 2019. The basic outlook for the forecast period is quite positive as growth should remain robust and the slowdown appears under control. This requires, however, improved discipline with regards to rising debt and more determined implementation of reform policies than we observe now. The government’s strict adherence to a 6.5 % GDP growth target distorts economic policy and encourages data manipulation to an extent that it may already be an issue.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2017)
    BOFIT Forecast for China 2/2017
    China’s economic growth has picked up from last year. Official figures show GDP rose by 6.9 % p.a. in the first half of 2017, but with the expected slowing towards end of the year, growth for this year should come in at around 6.5 %. In 2018 and 2019, economic growth should keep slowing gradually as China pulls back from debt-financed stimulus policies to a more sustainable framework. This gradual slowdown is, above all, a natural evolution for China’s economy that reflects on-going structural changes. The financial market risks are elevated and pose a risk to economic growth – and even more so if China continues to push the economy to the 2020 growth target with stimulus policies. Uncertainties related to Chinese statistical data have made it even more difficult to evaluate economic trends.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2018)
    BOFIT Forecast for China 1/2018
    The pace of China’s economic growth accelerated slightly last year, with official figures showing GDP growth of 6.9 % p.a. Even if the economic cycle appears on the upswing, growth is undergirded by the government’s heavy-handed stimulus policies. Since the Communist Party’s National Congress last autumn, the policy stance has tightened and the role of the party has been amplified. As a result, we have slightly boosted our GDP forecast for this year, putting it on par with China’s official GDP growth target of “about 6.5 %.” Going forward, high growth fuelled by debt will become unsustainable. China’s debt-to-GDP ratio is already high and will continue to rise in the forecast period. Thus, we expect growth to slow to a more sustainable level of around 5 % by 2020. Several sources of uncertainty from both domestic and international markets cloud China’s economic outlook. Downside risks have increased from our previous forecast.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2018)
    BOFIT Forecast for China 2/2018
    China’s economic growth is slowing and the outlook has become more uncertain with the country’s rising indebtedness and turbulence from trade policy disputes with the United States. The country’s adherence to a GDP growth target further complicates economic policy as the stimulus needed to meet that target conflicts with government efforts to manage China’s burgeoning debt problems and to move ahead with economic reforms. Acknowledging that problems with China’ s statistical data make it hard to obtain a clear picture of economic conditions, we nevertheless hold to our earlier forecast that Chinese economic growth remains strong despite slowing to around 5 % p.a. in 2020, the final year in this forecast period. While China possesses resources to deal with many of the challenges it may encounter, the deterioration of economic conditions means that it is important to prepare also for a steeper slowdown in China’s growth than predicted in our baseline forecast.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2019)
    BOFIT Forecast for China 2/2019
    The slowdown in growth continues as China struggles with a shrinking labour force, ineffectual allocation of capital, an increasing role of the state in the economy and postponement of necessary structural reforms. Adding to this is the business cycle downturn and escalating trade tensions during the past year. Given China’s rising public-sector deficit and soaring debt ratio, any room for stimulus is likely to be limited. With unreliable official figures that often fail to capture economic trends, it is more challenging than ever to assess China’s actual economic conditions. Nevertheless, we expect China’s economic growth to slow this year by about one percentage point from 2018 and slow further in the next two years of our forecast period by just under one percentage point a year. The deteriorating financial positions of Chinese corporations and increasing financial market risks raise the likelihood of a more rapid slowdown in growth.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2019)
    BOFIT Forecast for China 1/2019
    China’s economic growth, which witnessed a slowdown last year, continued to deteriorate in the early months of this year. Although the government has responded with measures to support growth, an already lax fiscal stance and extremely high debt-to-GDP ratio highlight the limits to debt-driven stimulus policies. Adding to the mix, the trade war between China and the United States has exacerbated economic uncertainty. Business-cycle weakness is accompanied by structural factors that depress the growth such as demographic shifts and the government’s failure to move ahead with economic reforms. While China’s economic growth is expected to continue to slow during 2019–2021, it will still outpace growth of the global economy. The risk of a sudden slump of growth has increased significantly. Unreliable official GDP data complicate assessment of China’s true economic conditions.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2020)
    BOFIT Forecast for China 1/2020
    China’s economic growth was already slowing before the outbreak of the coronavirus epidemic in the latter half of January. The epidemic and strict measures imposed by the government to rein in the accelerating infection rate brought China’s economy to a standstill. While we are now witnessing a recovery of the economy that is supported by stimulus measures, it is clear that some lost production will never be made up. Accordingly, our forecasts have been revised downwards. We now estimate that China’s real GDP will turn negative this year, but as the situation normalizes, growth is likely to be impressive next year before falling back to the earlier trend. Downside risks have dramatically increased due to the unpredictable fallout from the coronavirus pandemic.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2020)
    BOFIT Forecast for China 2/2020
    China’s economy has bounced back from lockdown in the first months of this year, as the country was able to lift restrictions to prevent the spread of the coronavirus, implement stimulus measures and demand for pandemic-related products boosted industrial output. We expect China’s GDP to grow slightly this year. While the rate of recovery has levelled off, the 2021 growth figure will be impressive given the weak comparison number for this year. The recovery of the economy has been uneven, with many existing structural problems made worse. The largest risks of the forecast are associated with a new broad-based wave of coronavirus infections and financial sector problems from a reacceleration in indebtedness while firms in many branches are finding it harder to service debt. Uncertainty is heightened by deteriorating foreign relations, especially with the United States.
  • Bank of Finland; Bank of Finland Institute for Emerging Economies (BOFIT) (2021)
    BOFIT Forecast for China 1/2021
    In the second half of 2020, China witnessed a rapid recovery from the covid-19 outbreak. Growth was supported by robust exports and economic stimulus measures geared to boosting fixed investment. China’s overall growth prospects, however, remain clouded by persisting structural imbalances further undermined by economic stimulus measures during the covid crisis. Due to the low base of 2020, the apparently strong economic growth this year will settle back to lower levels in the years ahead. Despite rapid recovery, the covid crisis has left the economy more vulnerable. Moreover, external uncertainties have increased, particularly with the efforts of the United States to lessen the interdependence of the two countries. China continues to postpone necessary policy reforms that would improve productivity. The latest five-year plan (2021–2025) calls for increased self-sufficiency and even more government intervention in the economy.
  • Bank of Finland; Bank of Finland Institute for Emerging Economies (BOFIT) (2021)
    BOFIT Forecast for China 2/2021
    Stimulus spending on the corporate sector and fixed investment, together with a strong export performance, have helped China recover rapidly from a pandemic-induced slowdown in the first half of 2020. While rapid recovery and last year’s low basis assure high on-year GDP growth figure this year, the speedy phase of economic recovery is over and lower growth lies ahead. China is struggling with a shrinking working-age population and high levels of debt that hinder deployment of capital to other uses. Moreover, there has been little progress in productivity enhancing reforms. While higher-than-expected growth is possible if consumer demand strengthens markedly, the risk of below-forecast growth has also increased during the pandemic. Growth could be severely impacted if debt becomes unsustainable, financial market disruptions generate uncertainty that spreads to the real economy or foreign relations hit an impasse.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2015)
    BOFIT Forecast for Russia 1/2015
    Russian economic growth came almost to a standstill in 2014. Since the fall in the price of oil, the economy has begun to contract. According to our forecast, Russian GDP will contract by over 4% in 2015 if the oil price is over USD 55 a barrel. High uncertainty will cause a shrinkage in private investment, while private consumption will be cut particularly by rapid inflation. Imports will be weighed down by contracting domestic demand, the weakness of the rouble and a fall in export income. Imports are forecast to contract by a fifth. In 2016–2017, the price of oil will rise moderately, leading to a gradual flattening out in the contraction of the economy and imports, as Russia’s export receipts recover. There are substantial forecast risks relating to investment and imports, in particular. The foundations of economic growth will be eroded as investment declines and the support and protective measures taken to counter the recession smother reforms and competition further.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2015)
    BOFIT Forecast for Russia 2/2015
    With the collapse of oil prices in 2014, the Russian economy has contracted this year. Assuming the oil price is slightly below $55 a barrel, our forecast sees Russian GDP shrinking around 4 % this year. Fixed investment is depressed by uncertainty, while last winter’s surge in inflation continues to discourage private consumption. Government spending is set to contract in real terms. Russia’s oil exports are experiencing unexpectedly robust volume growth. Imports have fallen and are expected to be about 25 % lower this year than in 2014. For 2016–2017, we assume a moderate rise in the oil price while the effects of the 2014 price collapse will continue to weigh on the economy still in 2016. We expect GDP and imports to contract slightly in 2016 and then make a slow recovery. Thereafter, growth will remain low as opportunities for growth have been curtailed by low fixed investment and systemic deficiencies that have not been addressed. Tensions in eastern Ukraine, sanctions, and lack of clarity about measures to restrict economic activity and trade in Russia will sustain uncertainty. Implementing stimulus has been difficult through monetary policy, and budget constraints limit the government’s options on the fiscal side. The forecast is surrounded by large risks, especially with respect to fixed investment and imports.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2016)
    BOFIT Forecast for Russia 1/2016
    Following the collapse in oil prices in 2014, Russia’s domestic demand fell by about 10 % last year. GDP contracted 3.7 %. Oil prices declined again in the second half of 2015. Given the oil export price shocks, we expect the Russian GDP to contract by 3 % this year if the oil price averages slightly above $40 a barrel (about 60 % below the average price in 2014). Russian imports slumped by 30 % in 2014–2015, and we expect imports to fall another 10 % this year due to the economic contraction and Russia’s falling export earnings. With rather high inflation eating away at purchasing power, we see domestic demand shrinking substantially in 2016, including a reduction in real government spending. While a gradual rise in oil prices will bring economic respite and revive imports in 2018, economic growth remains slow due to uncertainties and Russia’s poor business environment. The central risks in the forecast involve oil prices and changes in imports.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2016)
    BOFIT Forecast for Russia 2/2016
    Russian GDP has so far this year contracted less than one per cent from a year ago. The decline has been constrained by a notable recovery in oil prices and a large fall in imports caused by a weak ruble. We now expect Russian GDP to shrink by 1 % for 2016 overall, with imports falling about 7 %. The oil price is expected to creep up from below $45 a barrel this year to just under $55 a barrel in 2018. While GDP recovers gradually in 2017, growth will be slow due e.g. to inadequate fixed investment and the fiscal challenges facing government at all levels. As the economy recovers and Russian export earnings increase, imports will grow moderately. The main forecast risks continuously involve oil prices, imports and government finances.
  • Bank of Finland; Institute for Economies in Transition (BOFIT) (2017)
    BOFIT Forecast for Russia 1/2017
    After two years of decline, we see Russian GDP growth, supported by higher oil prices, rising to 1.5 % this year. Growth is led by private domestic demand which also stimulates imports. Russian growth should remain sluggish in coming years as the economy is already operating near full capacity and needed structural reforms are still nowhere in sight.