Russia’s economy will continue to struggle in 2023 despite the war and sanctions, according to forecasts released Tuesday by the International Monetary Fund (IMF), which forecast growth of 0.7% this year, better than the 0.4% recorded three months ago. ago was expected.
It was believed that GDP would contract sharply in 2022, falling by 6%, but Russia ended the year with a recession of “only” 2.1%.
The situation looks better for 2023: in October last year the IMF predicted a recession of 2.3%, but in January that turned into a small growth of 0.3%.
Now the report published on the occasion of the spring meetings goes further, with a growth forecast of 0.7% for 2023.
“Russia managed to maintain momentum (from 2022) by applying very strong fiscal measures last year, which we expect to continue this year”said IMF chief economist Pierre-Olivier Gourinchas during a telephone press conference.
The country increased government spending and ended up with a deficit of 2.2% of GDP in 2022, despite significant revenues from hydrocarbon sales, in a context of general rise in energy prices.
“I believe Russia used the fiscal space it had to support its economy. But a large part of its budget spending is actually military spending.”said Petya Koeva Brooks, deputy director of the IMF’s research division.
The IMF forecasts that the deficit will reach 6.2% of GDP in 2023.
This is “very important by Russian standards”, emphasizes an IMF spokesman.
In the longer term, the impact of the war is clear, Gourinchas said: “By 2027, we expect the Russian economy to be 7% smaller than without the war. The cumulative effect between 2022 and 2024 is obviously very strong.”
Source: DN
