IMF Downgrades Projection for Russia’s Economic Growth in 2015-2016

The Russian economy is projected to shrink by 3.8 percent in 2015 and by 1.1 percent in 2016, according to International Monetary Fund (IMF) forecast.

MOSCOW (Sputnik) — International Monetary Fund (IMF) downgraded its projection for the growth of the Russian economy in 2015 and 2016 in its April World Economic Outlook, released on Tuesday.

According to the report, the Russian economy is projected to shrink by 3.8 percent in 2015 and by 1.1 percent in 2016.

These estimates are lower by 0.8 and 0.1 percentage points for 2015 and 2016 respectively, from a January IMF report.

The document said that Russia's economic performance in the second half of 2014 was stronger than expected but geopolitical tensions and low oil prices point to a weakening of the economic situation at the start of 2015.

Troubles with the Russian economy are expected to affect not only Russia but also the outlook in the Commonwealth of Independent States (CIS) as a whole.

The report noted the depreciation of the ruble in light of lower oil prices, adding that the Canadian dollar and the Norwegian krone have also decreased in value.

In 2015-2016, Russia, alongside Latin American countries and parts of the Middle East, is expected to gradually return to more "normal" growth rates.

Inflation in Russia is projected to stand at 17.9 percent in 2015 and 9.8 percent the following year.

Falling oil prices and Western sanctions imposed on Moscow over its alleged role in the Ukrainian crisis are listed as reasons behind the weakening of Russia's economy.

Russian Economic Development Minister Alexei Ulyukayev said earlier in April that the economic recession in the country would turn around in the third quarter of 2015, and the GDP increase in the last quarter of the current year or the beginning of 2016.