IMF Cuts Russia’s GDP Growth Outlook Again

According to a new World Economic Outlook Update published on the IMF’s website on Monday, Russia’s GDP is expected to grow by 3.7 percent in 2012 and by 3.8 percent in 2013.

In 2011, the Russian economy grew by 4.3 percent.

"Financial conditions in the three largest CIS economies (Kazakhstan, Russia, Ukraine) have deteriorated with increased financial stress in the euro area periphery and higher global risk aversion,” the new IMF report said.

"Given downside risks, the priority is to strengthen policies by improving fiscal balances, accelerating financial system reform, and tightening the monetary stance where inflation risks are high,” the document underlined.

The IMF upgraded, though, its forecast on Russia’s budget to a surplus of 0.5 percent of GDP in 2012 from its previous forecast of 0.1 percent of GDP, and to a surplus of 0.2 percent of GDP from a deficit of 0.7 percent in 2013.

The IMF expects Russia’s state debt to stand at 11 percent of GDP in 2012, compared with 11.5 percent of GDP projected in July, and at 9.9 percent of GDP in 2013 compared with the previous forecast of 11.3 percent.