IMF Upgrades Russia’s 2023 Economic Growth Forecast, Cautions on 2024

BySamson Ononeme

Oct 11, 2023 ,
IMF Upgrades Russia's 2023 Economic Growth Forecast, Cautions on 2024

Key Insights

  • The IMF has raised its 2023 economic growth forecast for Russia to 2.2%, a significant increase from the previous projection of 1.5% made in July.
  • However, the IMF has slightly reduced its forecast for Russia’s economic growth in 2024 from 1.5% to 1.3%.
  • Globally, the IMF maintained its 3% economic growth projection for 2023 but increased its inflation forecast to 6.8%.

The International Monetary Fund (IMF) has boosted its economic growth forecast for Russia for 2023, signaling positive developments for the nation’s financial outlook.

According to an updated report on the IMF’s website, Russia’s Gross Domestic Product (GDP) is anticipated to surge by 2.2% by the close of 2023, marking a notable increase from the previous projection of 1.5% made in July. However, the IMF did temper its expectations for Russia’s economic growth in 2024, slightly revising it down from 1.5% to 1.3%.

While the IMF maintained its global economic growth projection at 3% by the end of 2023, it also noted a slight uptick in its inflation forecast, which now stands at 6.8%.

Notably, the growth forecasts for other major economies saw adjustments, with the eurozone’s outlook being revised down to 0.7% (from 0.9%) and China’s growth projection down to 5% (from 5.2%). Conversely, the United States’ growth projection saw an improvement, rising to 2.1% (from 1.8%).

IMF slightly lowers its forecast for Russia’s 2024 GDP growth

This upgraded IMF forecast for Russia aligns more closely with the estimates put forth by Russia’s Ministry of Economic Development and the Central Bank. The Central Bank’s baseline scenario for 2023 anticipates Russian GDP growth ranging from 1.5% to 2.5%, with a more conservative outlook for 2024 at 0.5% to 1.5%.

The Ministry of Economic Development is even more optimistic, forecasting a 2.8% expansion in the Russian economy in 2023, with a slight slowdown to 2.3% in the following year, followed by continued growth slightly above 2%.

Read also! World Oil Prices Surge as Russia Bans Fuel Exports

Notably, the Russian economy displayed resilience in the second quarter of 2023, as reported by Rosstat. During this period, the economy expanded by 4.9% compared to the same quarter in 2022, despite the initial shock that followed Russia’s “military special operation” in Ukraine.

In the first quarter of 2023, Russia experienced a 1.8% decline in GDP, but this rebound in the second quarter offers hope for a more robust recovery.

Samson Ononeme

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