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IMF improves Russia’s GDP dynamics outlook for 2016

October 04, 16:21 UTC+3
IMF forecasts of Russia's GDP have improved immensely since spring of 2016
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© AP Photo/Jose Luis Magana

WASHINGTON, October 4. /TASS/. The IMF has repeatedly improved its forecast for Russia's GDP dynamics. Now, it expects Russia's GDP to decline by 0.8% in 2016 and to grow by 1.1% in 2017, according to the IMF’s Global Financial Stability Report released on Tuesday.

In July, in its regular annual review of the Russian economy, the IMF named less optimistic figures - the decline of GDP by 1.2% in 2016 and GDP growth by 1% in 2017. Those July figures were also revised upward in comparison with the outlook released in May.

Thus, the IMF forecasts of Russia's GDP have improved since spring of 2016.

Inflation declines

The International Monetary Fund (IMF) also improved the inflation outlook for Russia to 5.9% in 2016 and 4.9% in 2017. The new outlook is much better than July expectations of the IMF, which accordingly totaled 6.6% for this year and 5.2% for 2017. As usual in Russia, it concerns December-to-December estimates.

Finally, the new report contains predictions regarding Russia’s labor market. The IMF expects the unemployment rate to amount to 5.8% in 2016 and 5/9 % in 2017.

Comments on the figures

The IMF calls the continuing economic recovery in Russia and Brazil as one of the key events in the global economy, which required adjustments in the previous report of IMF that was released in April.

Two more changes include the revision of the IMF’s 2016 forecast for the US downward and gradual manifestation of the consequences of Brexit (the UK decision to withdraw from the EU).

In other comments to the figures it stated that the increase in oil export revenues due to the strengthening of oil prices, brings some relief to exporters of oil and especially to the Russian economy. Nevertheless, the prospects for growth in Russia in 2017 and in the following years remain suppressed in particular due to the impact of sanctions on productivity and investment.

As for the oil price, according to the report, in 2016 the average price will reach $42.96 per barrel, and in 2017 it will grow to $50.64 per barrel. This concerns the arithmetic average price of Brent, Dubai and West Texas blends.

The rating is given on the basis of transactions on the futures markets.

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