June 2, 2017 / 10:10 AM / 3 years ago

World Bank: Russia must ensure price stability to spur growth

World Bank CEO Kristalina Georgieva speaks during an interview at the St. Petersburg International Economic Forum (SPIEF), Russia, June 1, 2017. REUTERS/Sergei Karpukhin

ST PETERSBURG, Russia (Reuters) - Russia must keep inflation low and stable if is to have a chance of spurring economic growth via increased consumer spending, the World Bank’s chief executive officer said.

Inflation stood at around 17 percent in early 2015, but Russia has since reined in consumer prices, bringing annual inflation down to a post-Soviet low of around 4 percent.

Kristalina Georgieva, the World Bank’s chief executive officer, said keeping inflation low was important to give Russia’s middle class the confidence and ability to spend more.

The World Bank sees Russia’s gross domestic product growing by 1.3 percent in 2017 and 1.4 percent in 2018 and expects annual inflation to stabilize close to the central bank’s target of 4 percent.

Georgieva said Russia also needed to ensure overall macroeconomic stability, pay attention to major social issues, and boost competitiveness if it wanted to grow the economy.

Georgieva, who served as the World Bank’s director for Russia in the mid-2000s, was speaking to Reuters on the sidelines of an economic forum in St Petersburg.

Reporting by Andrey Ostroukh; Editing by Andrew Osborn/Alexander Winning

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