IMF says Russian govt’s efforts to battle crisis positive

WASHINGTON, Aug 10 (PRIME) -- Falling oil prices and Western sanctions are dragging Russia into recession and efforts of the government and the central bank will have a positive impact on the situation, Bikas Joshi, director of the International Monetary Fund’s (IMF) resident representative office in the country, said Monday.

Falling prices for oil, which contributes 50% of the Russian budget revenue, inflicted the most serious damage, but the Western sanctions exacerbated the situation, and these two shocks pushed investment out of the market, Joshi said in the IMF’s audioblog.

The ruble’s depreciation led to contraction of household incomes, but increased the attractiveness of the Russian market for foreign investors.

In order to normalize the situation, the Russian central bank should continue to regulate the currency market with market mechanisms, while the government should improve business environment and relations within the Eurasian Economic Union, and also solve issues of the budget economy and demography, including by raising the retirement age, he said.

In July, the IMF improved its forecast for contraction of the Russian economy to 3.4% from 3.8%, but worsened the economic growth forecast in 2016 to 0.2% from 1.1%.

End