World Bank cuts Russia 2019 growth outlook due to lower oil output

MOSCOW (Reuters) - The World Bank cut Russia’s 2019 economic growth forecast to 1.2% from 1.5% because of oil production cuts.

It held its 2020 and 2021 forecasts at 1.8%.

“Tighter monetary policy, combined with a value-added tax hike at the beginning of 2019, are also contributing to weaker growth momentum in the remainder of 2019,” the bank said in a report published late on Tuesday.

Russia’s average daily oil output has dropped to a three year-low in June after contaminated crude clogged its main export route, two sources familiar with official data said on Tuesday.

The World Bank said private investment remained subdued “due to policy uncertainty and prospects for slowing potential growth over the longer term due to worsening demographic pressures.”

Reporting by Elena Fabrichnaya; writing by Anton Kolodyazhnyy; editing by John Stonestreet