The IMF has worsened its forecasts for Russia

The Russian economy has entered a recession. Representatives of the International Monetary Fund announced this on April 30. The IMF has lowered its forecast for economic growth in Russia to almost zero, and also stated that capital outflow from the country will amount to $100 billion. If the situation develops negatively, the IMF does not rule out further revisions of the forecast. Details from Natalia Suvorova.

Photo: Alexey Kudenko, Kommersant / buy photo

IMF experts named geopolitical uncertainty in connection with the crisis in Ukraine as one of the main reasons for the worsening forecasts. According to IMF forecasts, the Russian economy will grow by 0.2% this year, and by a maximum of 1% next year. In addition, inflation in the country may exceed 6%. If we consider a recession to be a period of negative economic growth for two consecutive quarters, then Russia has already entered it, said Antonio Spilimbergo, adviser to the IMF's European Office. However, the banking system in the country remains stable, he noted.

"The Russian banking system remains quite stable. Firstly, unlike the crisis of 2008-2009, there are now no sharp currency discrepancies in the world system. Secondly, the Central Bank has enough reserves to cover possible loan losses. In general, the capitalization of the banking The system is quite adequate. But at the same time, the system is subject to stress due to geopolitical uncertainty,” Spilimbergo said.

Despite the stress, according to IMF forecasts, Russia will end this year with a federal budget surplus of 0.3% of GDP. Last year the Russian budget was in deficit. To curb inflation, the IMF recommended that Russia tighten monetary policy and also carry out structural reforms. In addition, economic growth is linked to the geopolitical situation. If the Ukrainian crisis worsens, the Russian economy will find itself in a deep recession, Dmitry Dorofeev, debt markets strategist at the BCS financial group, told Kommersant FM.

“Tough times are coming, when budget expenditures are rising, and monetary policy is being tightened by raising rates. Therefore, I think we will have a very difficult two or three quarters, after which stabilization and growth will begin. The Russian economy also depends on the development of the situation in Ukraine. If the situation will worsen, new sanctions will be introduced against Russia, this will provoke a new outflow of capital, a reduction in investment programs. This, of course, will create long-term negative consequences for our economy. Therefore, if the situation worsens, then, naturally, we may see a deeper recession. by 1-2%,” Dorofeev explained.

While there are no indicators for the second and third quarters of this year, it is premature to talk about a recession in Russia. This is what Mikhail Krylov, director of the analytical department at United Traders, thinks.

"In this case, this is obviously within the margin of error. This is a deeply politicized decision. I think that there is a large share of error in the IMF forecast. 19-33%, that the IMF was wrong. The percentage of accurate forecasts is very low. At the same time, Russia is the only country in the IMF forecasts, the statistical significance of which is not respected, that is, it is impossible to talk about the accuracy of the forecasts,” Krylov explained.

As IMF experts note, the Ukrainian crisis will also affect the European economy. The fund has already lowered its economic growth forecast for 22 European countries to 1.9%. A slowdown in Russian economic growth could primarily hit Belarus, Moldova and the Baltic states, as well as Russia’s trading partners in Central Europe.

The IMF representative also said that international sanctions against Russia threaten to further slow down investment in the country. According to him, the exact economic damage from the sanctions cannot yet be determined.

“We have a very difficult two or three quarters ahead of us.”