IMF: Russian Economy Emerges from Recession

The Russian economy is emerging from recession after the dual shocks of the drop in oil prices and international sanctions imposed on it, International Monetary Fund (IMF) said.

    The Washington-based crisis lender again revised its 2016 forecast for Russian gross domestic product upward, seeing a contraction of just 0.6%, according to Ernesto Ramirez Rigo, who led an IMF mission to Moscow this month.

    In October, the IMF predicted the balance for the year at -0.8%, after a July outlook of -1.2%. "There are signs of a nascent turnaround," Ramirez Rigo said. 

    For 2017, the IMF continues to forecast economic expansion in Russia at a "subdued" rate of 1.1%, helped by a modest recovery in oil prices. "The recovery should be on a stronger footing in 2017," Ramirez Rigo said. 

    The return to growth comes with inflation falling below 6% and on a trajectory to continue slowing, according to the IMF. The Russian government is enacting budget deficit controls that are "necessary and ambitious ... to adjust to permanently lower oil prices," Ramirez Rigo said. He urged structural reforms to the pension system, tax exemptions and subsidies to cement fiscal stability.