The International Monetary Fund (IMF) released a new World Economic Outlook report. On the 11th, saying that thanks to the relatively stable oil exports, and domestic demand. Russia’s economic contraction was not as severe as expected.
“The contraction of the Russian economy was less severe than previously expected. Reflecting the resilience of Russia’s oil exports and its domestic demand. Supported by stronger fiscal and monetary policies,” the report said.
The IMF said that the Russian economy shrank by 21.8% at an annualized rate in the second quarter of this year. IMF said more while it is expected to shrink by only 3.4% for the whole of this year. In June, the group had forecast that the Russian economy would shrink by 6 percent this year.
Russian President Vladimir Putin said in September that Russia’s economic situation is gradually “normalizing”. The unemployment rate has dropped to 3.8%, the lowest level in history, and the annual inflation rate has dropped to 13.7%. Which is far lower than many Western governments this spring. When Russian sanctions began to take effect. According to Putin, the worst is over.
After Russia launched a special military operation against Ukraine on February 24. The European Union joined the United States in imposing severe economic sanctions on Russia. Including seeking to wean itself off its dependence on Russian oil and gas. Which has led to tight European energy supplies and soaring prices.
According to Agence France-Presse analysis, the new issue of the “World Economic Outlook Report” to some extent supports the Russian government’s views on the country’s economy. While Russia’s economy may face long-term challenges, for now, its energy exports appear to be helping Russia survive Western sanctions.
According to data from the Russian Ministry of Finance. In the first eight months of this year, more than 40% of the Russian Federation’s fiscal revenue came from the oil and gas industry.
Elina Ribakova, vice-president of the Institute of International Finance, told AFP: “We can assume that the impact of the first few rounds of sanctions (on Russia) has passed, especially in the financial sector.”
The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers. Last week decided to cut production sharply from November this year. A decision expected to continue to push up oil prices. Which was welcomed by the Russian government. USA media disclosed on the 11th that the White House had asked Saudi Arabia to suspend its decision to support major oil producers to cut oil production sharply. But the latter “straightforwardly” refused.
According to Agence France-Presse analysis, in view of the difficulty of the Group of Seven countries. On the “price limit” measures for Russia’s oil exports, and it is difficult to obtain a response from other countries. Russia’s economic prospects seem to be improving. According to a new forecast by the International Monetary Fund, the Russian economy will shrink by 2.3% next year, down from the 3.5% predicted in July.