IMF says cuts Russia’s ‘14, ‘15 econ growth forecasts to 0.2%, 1.0%

MOSCOW, Apr 30 (PRIME) -- The International Monetary Fund (IMF) has reduced the Russian gross domestic product (GDP) growth forecast for 2014 and 2015 to 0.2% and 1.0% respectively, the fund’s advisor Antonio Splimbergo said Wednesday, RIA Novosti reported.

In April, the IMF forecasted a 1.3% GDP rise in 2014 and a 2.3% one in 2015.

The country’s economy has already entered a recession, Splimbergo said.

The federal budget surplus will amount to 0.3% of GDP in 2014, he said.

The net capital outflow will amount to U.S. $100 billion with the bulk of it represented by households switching to foreign currencies from the weakening ruble.

According to a statement issued by the IMF after consultations with the Russian government, the central bank must be ready to make its credit policy even severer this year if inflation does not slow down.

The monetary authority has raised the repo rate to 7.5% from 7.0% at the last meeting on April 25 to counter high inflation risks.

Splimbergo said that the fears of Western sanctions have a greater impact on the Russian economy than the sanctions themselves.

End