The revised appraisal is more optimistic than the Bank's April estimate, which projected a contraction of 3.8 percent in 2015 and a continued decline of 0.3 percent in 2016. The revised projections are based largely on the continuing recovery in oil prices, which have resulted in slowing inflation and a recovering ruble.
Birgit Hansel, the World Bank's Lead Economist for Russia, was quoted in the release saying that "the revised forecast is largely driven by the adjustment of oil prices over the previous two months that is supporting the ruble exchange rate and a slightly faster retreat of inflation." According to Hansel, the new conditions "allow the Central Bank of Russia to pursue monetary easing at a more rapid pace for the rest of 2015, as a result bringing down borrowing costs and increasing lending to firms and households. Both investment and consumption growth would contract slightly less than previously expected."
