THE TELEGRAPH: The World Bank has given warning of serious social discontent in Russia after delivering a bleak assessment of the country's economy.
Scotching optimism that the world's largest country may already be in recovery, the bank predicted that Russia's economy is contracting far more sharply than the Kremlin has acknowledged.
According to revised government forecasts, the Russian economy will shrink by 2.2pc this year. But it its latest economic report on Russia, the World Bank predicts that Gross Domestic Product will actually contract by 4.5pc.
The assessment comes as foreign investors focussed on emerging markets again start to flirt with Russia after months of record capital flight in the wake of last August's war with Georgia and a collapse in the price of oil.
The Russian stock exchange's benchmark RTS index has gained over 30pc this year alone, outpacing most emerging markets, after a modest recovery in oil and metal prices.
But Zeljko Bogetic, the World Bank's lead Russia economist, cautioned against such optimism.
"As the crisis continues to spread to the real economy around the world, initial expectations that Russia and other countries will recover fast are no longer likely," he said. >>> By Adrian Blomfield in Moscow | Monday, March 30, 2009
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