OREANDA-NEWS The European Commission (EC) has improved the forecast of economic growth in Russia for 2018-2020. This is stated in the published Thursday autumn economic forecast of the EC.

"Economic growth in Russia in 2018 will be 1.7%, in 2019 - 1.6%, in 2020 - 1.8%," the document says. In its spring forecast, the European Commission promised the Russian economy 1.5% growth in 2018, 1.6% - in 2019 and 1.7% - in 2020.

"The economic recovery developed gradually, as the authorities pursued a tight monetary and tax policy, as well as used a favorable external economic environment to increase liquidity and increase the stability of the economy to macroeconomic shocks. The situation is likely to continue its progressive development, as tax and structural reforms have been launched and the government is likely to use the current jump in oil prices to increase public spending and stimulate economic activity," the document says.

Analyzing the economic prospects of Russia, the European Commission notes the progress of structural reforms, but at the same time emphasizes that significant economic challenges remain unanswered.

Among other risks, the EC notes the ongoing process of population ageing and the shrinking labour market, which can only be partially offset by pension reform and raising the retirement age. Another systemic problem of the Russian economy, the European Commission calls "significant geographical and social imbalance" in the development of various regions of the country, which undermines the effectiveness of the domestic market.

It also traditionally mentions in its forecast foreign policy risks, such as the possibility of tougher sanctions, or the threat of capital outflows in the event of a further strengthening of the dollar. The European Commission also refers to the risks of the Russian policy of import substitution, which after the introduction of EU sanctions and Russian counter-sanctions seriously affected exporters from the EU. The EC calls it "a policy of separation from the outside world".