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IMF raises Russian GDP outlook | |
(about 3 hours later) | |
Despite the change, the exit of Western firms could still harm the country’s economy in the long run, the body has warned | Despite the change, the exit of Western firms could still harm the country’s economy in the long run, the body has warned |
The International Monetary Fund (IMF) has raised its growth forecast for the Russian economy in 2023 in its World Economic Outlook report released on Tuesday. | The International Monetary Fund (IMF) has raised its growth forecast for the Russian economy in 2023 in its World Economic Outlook report released on Tuesday. |
Russia’s GDP is expected to grow 0.7% this year, an upwards revision from the 0.3% increase that the IMF predicted in its January report. | Russia’s GDP is expected to grow 0.7% this year, an upwards revision from the 0.3% increase that the IMF predicted in its January report. |
According to IMF chief economist Pierre-Olivier Gourinchas, Russia was “able to maintain quite a bit of momentum in the economy by taking, for instance, very strong fiscal measures.” | According to IMF chief economist Pierre-Olivier Gourinchas, Russia was “able to maintain quite a bit of momentum in the economy by taking, for instance, very strong fiscal measures.” |
Despite the upward revision for the current year, the organization lowered its 2024 GDP growth forecast for Russia to 1.3% from the earlier 2.1%, expecting labor shortages and the exit of Western companies to affect economic growth. According to the report, the unemployment rate in Russia was 3.9% at the end of 2022. While analysts expect it to fall to 3.6% in 2023, next year it is forecast to rise again to 4.3%. | Despite the upward revision for the current year, the organization lowered its 2024 GDP growth forecast for Russia to 1.3% from the earlier 2.1%, expecting labor shortages and the exit of Western companies to affect economic growth. According to the report, the unemployment rate in Russia was 3.9% at the end of 2022. While analysts expect it to fall to 3.6% in 2023, next year it is forecast to rise again to 4.3%. |
“An exodus of multinationals, loss in human capital, isolation from global financial markets, and impaired access to advanced technology goods and know-how will hamper the Russian economy,” an IMF spokesperson said, as cited by Reuters. | “An exodus of multinationals, loss in human capital, isolation from global financial markets, and impaired access to advanced technology goods and know-how will hamper the Russian economy,” an IMF spokesperson said, as cited by Reuters. |
He also warned that the Russian economy would be in danger if the terms of trade worsen due to new sanctions, which would result in a decline in the current account surplus and in fiscal revenues. | He also warned that the Russian economy would be in danger if the terms of trade worsen due to new sanctions, which would result in a decline in the current account surplus and in fiscal revenues. |
“The latter means that the authorities will need to either curtail spending or find ways to finance noticeably higher deficits,” the spokesperson added. | “The latter means that the authorities will need to either curtail spending or find ways to finance noticeably higher deficits,” the spokesperson added. |
Russia's budget deficit was 2.4 trillion rubles ($29.2 billion) in the first quarter, down from a surplus of 1.13 trillion rubles ($13.7 billion) in 2022, while the current account surplus dropped by roughly 73% year-on-year to $18.6 billion. Both changes were brought about by heavy spending and lower energy revenues, analysts say. | Russia's budget deficit was 2.4 trillion rubles ($29.2 billion) in the first quarter, down from a surplus of 1.13 trillion rubles ($13.7 billion) in 2022, while the current account surplus dropped by roughly 73% year-on-year to $18.6 billion. Both changes were brought about by heavy spending and lower energy revenues, analysts say. |
Earlier, official forecasts from the Ministry of Economic Development predicted Russian GDP to decrease by 0.8% in 2023 and return to growth in 2024 at 2.6%. The Bank of Russia also recently revised the GDP dynamics to -1%/+1% this year, up from its October forecast, which predicted an economic contraction in the range of 1-4%. The regulator is expected to publish an updated medium-term macroeconomic forecast later this month. | Earlier, official forecasts from the Ministry of Economic Development predicted Russian GDP to decrease by 0.8% in 2023 and return to growth in 2024 at 2.6%. The Bank of Russia also recently revised the GDP dynamics to -1%/+1% this year, up from its October forecast, which predicted an economic contraction in the range of 1-4%. The regulator is expected to publish an updated medium-term macroeconomic forecast later this month. |
For more stories on economy & finance visit RT's business section | For more stories on economy & finance visit RT's business section |
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