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World Bank: Russia Banking Sector Remains at Risk Despite Recent State Costly Bailouts

"The banking sector remains afflicted with high concentration and state dominance," the World Bank said in the report

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world bank, russia banking sector
A Russian flag flies over the headquarters of the country's central bank in Moscow (file photo) RFERL

The World Bank says Russia’s banking sector is stabilizing but remains at risk despite recent state bailouts of Russian banks totaling tens of billions of dollars.

In a scheduled report dated June 10, the Washington-based lender estimated that state-owned banks now account for 62 percent of all assets at Russian banks following the closure of hundreds of lenders in recent years and the rescue of several major financial institutions.

“The banking sector remains afflicted with high concentration and state dominance,” the World Bank said in the report. The warning comes less than a week after the World Bank, the lending arm of the International Monetary Fund, cut Russia’s 2019 economic growth forecast to 1.2 percent from a previous estimate of 1.5 percent because of oil production cuts.

world bank, russia banking sector
“The banking sector remains afflicted with high concentration and state dominance,” the World Bank said in the report. Pixabay

While the bank said Russia’s macroeconomic and fiscal buffers were strong, economic growth prospects remained modest. “Downside risks to Russia’s growth outlook stem from the potential expansion of sanctions, deterioration of financial market sentiment, souring global trade environment and a dramatic drop in oil prices,” the report said.

Russia’s business climate faces stiff headwinds for many reasons, including the economic sanctions imposed by the United States, Japan, and European allies for Moscow’s 2014 seizure of Crimea, along with alleged Russian interference in U.S. elections.

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The World Bank projected annual economic growth for the years 2020 and 2021 at 1.8 percent. “On the upside, national projects aimed at strengthening human capital and increasing productivity, if well-implemented, could positively affect Russia’s potential growth in the medium-term,” the bank said in its report.

Russia’s economy expanded 2.3 percent in 2018, aided in large part by one-off projects, buoyant energy prices, and an influx of tourists for the soccer World Cup. (RFERL)

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To Mock Elon Musk, Russia Launched a Toy Car into Space

Rogozin is known for his rivalry with Musk which often comes out publicly as sarcastic banters

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Elon Musk, Russia, Toy
In response to Musk's space stunt, the team from Russia's Tomsk State University launched a toy replica of the red Zhiguli car. Flickr

Mocking SpaceX CEO Elon Musk launched a Tesla car into space in 2018, Russian scientists sent their own red car outside the Earth, but the car was actually just a toy.

In February 2018, SpaceX launched its reusable heavy-lift launch vehicle — Falcon Heavy for the first time along with a cherry-red Tesla Roadster with a mannequin called ‘Starman’ behind the wheel.

In response to Musk’s space stunt, the team from Russia’s Tomsk State University launched a toy replica of the red Zhiguli car owned by Dmitry Rogozin, who serves as the Director General of Russia’s Roscosmos space agency, Futurism reported on Friday.

Rogozin is known for his rivalry with Musk which often comes out publicly as sarcastic banters on micro-blogging site Twitter.

Elon Musk, Russia, Toy
Mocking SpaceX CEO Elon Musk launched a Tesla car into space in 2018. Pixabay

Along with the toy car, the Russian scientists also put a tiny cut-out of a smiling Rogozin in the driver’s seat.

Unlike ‘Starman’, however, the Rogozin replica returned to the Earth and landed an estimated 2,000 kilometres away from its launch site after about 16 hours of flight, the report said.

Russia’s space mockery targeting Musk was executed just days after Rogozin said he would not hire Musk to get help with reusable rocketry.

While Rogozin has not met Musk as yet, he frequently reacts publicly to the SpaceX CEO’s tweets and slams SpaceX over ‘killing competitors’.

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Rogozin said he would gladly meet the multi-billionaire if he ever comes to Russia for a private visit. (IANS)