"After a decade of high growth, the global financial crisis has affected Russia, posing a new challenge for macroeconomic policy. Having grown at an impressive 7% a year during 1999-2007 - and at an overheating 8% in the first half of 2008 - the Russian economy has started a gradual slowdown," the World Bank said in its Russian Economic Report.
The Russian government's GDP growth forecast for 2008 remains unchanged at 7.8%. However, government officials have recently said the domestic economy will grow by 7-7.3% in 2008.
The Finance Ministry and the Economic Development Ministry are expected to give their forecast of GDP growth for 2009 by December 1. Experts say Russia's GDP growth is likely to slow down to 3%-5% next year due to the financial crisis.
The report also said unemployment in Russia was expected to rise moderately to 5.9% from 5.3% by the end of the year, reflecting losses in labor intensive sectors such as construction, trade and services, and also the financial sector.
Inflation in Russia is expected to be at least 12% in 2009 compared with the government's forecast of 7.5-8.5%, the report said.
"In 2009, reducing inflation below 12% will be difficult. This could be possible if the global financial crisis shows signs of easing by the end of that year," the report said.
Russia's inflation in 2008 is expected to hit 13.5%, corresponding to the Russian government's projections, the report said.
Net capital outflow from Russia could reach $50 billion in 2008, and double in 2009 as companies continue to repay foreign debts amid a lack of large foreign investment, the report said.
Russia's Central Bank predicted in late October that net capital outflow from Russia could reach $20 billion in 2008, with net inflow into the country forecast at $20 billion in 2009.
