Fitch Ratings downgraded Russia's GDP growth forecast for 2019 from 1.5% to 1.2%, following an unexpectedly weak economic performance in the first quarter. 

The agency still believes GDP growth will accelerate to 1.9% in 2020 and 2021, after the government's RUB27 trillion spending programme on infrastructure and the social sphere kicks in, coupled with slowing inflation and the waning effect of the VAT hike that is expected to push drive consumption. 

As analysed by bne IntelliNews, the Russian economy is stagnating in the beginning of 2019 and Russian President Vladimir Putin’s plan to revitalise it with the 12 national projects is off to a very slow start.

Previously in June the World Bank (WB) also cut its 2019 GDP growth outlook for Russia from 1.5% to 1.2% in the latest Global Economic Prospects report. This makes the second time Russia's GDP growth forecast for 2019 was cut by the bank.

"The projection for 2019 has been downgraded to 1.2%, reflecting oil production cuts," the WB commented, adding that "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 WB's outlook for 2020 and 2021 remained unchanged at 1.8% based on the assumption that "investment is expected to accelerate moderately as public spending on infrastructure picks up. 

Russia's GDP growth in the first quarter of 2019 disappointed with a mere 0.5% growth – well below even the most pessimistic forecasts -- following rather moderate results from first-quarter base sector statistics. That result has analysts hoping for a fiscal spending stimulus later in 2019 under the National Projects to support output, as well as more rate ruts in the Central Bank of Russia (CBR) key interest rates.