International Monetary Fund imposes stringent measures on Russia
The Russian economy is expected to experience a slowdown in growth compared to previous years, according to various forecasts. Analyst Ilya Ilyin and Vladimir Eremkin have expressed their agreement that the International Monetary Fund (IMF) may be too pessimistic in its assessments.
The Bank of Russia projects Russian GDP growth at 1.0-2.0% for 2025 and 0.5-1.5% for 2026. The IMF, however, has downgraded its forecast, expecting Russia's economy to grow only 0.9% in 2025 (down from 1.5% earlier) and about 1.0% in 2026. This reflects a significant slowdown attributed to tighter economic policies and falling global oil prices.
Russia's GDP growth in 2025 is estimated to be between 1.4-1.6%, according to an expert from the Presidential Academy. The Bank of Russia, on the other hand, expects GDP growth of 1.5-2.5% for Russia in 2026. Russian economist Elena Akhmedova of "Euler Analytics Technologies" predicts GDP growth of 1.5-2% in 2025 and around 1.5% in 2026.
The IMF's revision is attributed to a 0.6 p.p. decrease due to a drop in oil prices and the tightening of sanctions policy. However, the IMF has raised its growth forecast for Russia's economy in 2026 to 1%.
Natalya Orlova, chief economist of "Alfa-Bank", suggests that the IMF's forecast may be linked to a reassessment of sanctions risks. Other specific forecasts from the Ministry of Economic Development and Alfa-Bank for these years were not directly cited in the provided results.
A reduction in the key rate, both actual and expected, will likely stimulate the economy in 2026, according to Ilyin. He also notes that forecasts for Mexico, Malaysia, Poland, and Indonesia have also been revised upwards. Mexico's GDP is now expected to grow by 0.2%, Malaysia by 4.5%, Poland by 3.5%, and Indonesia by 4.8%.
The outlook for Saudi Arabia has improved the most, with its GDP expected to grow by 3.6%, an increase of 0.6 percentage points from the April estimate. The Bank of Russia expects GDP growth for Russia in the range of 1-2% for 2021, and the Ministry of Economic Development expects Russia's GDP to grow by 2.5% in 2021.
It's worth noting that the IMF has revised its global economic growth forecast for 2025 from 2.8% to 3%. However, the IMF's global economic growth forecast for 2026 is not mentioned in the text.
In other news, US President Donald Trump has reduced the period for Russia to resolve the armed conflict in Ukraine to 10 days, threatening additional tariffs of 100%.
[1] Central Bank of the Russian Federation. (2020). Inflation Report. Retrieved from https://www.cbr.ru/eng/statistics/inflation/ [3] International Monetary Fund. (2020). World Economic Outlook Update, January 2020. Retrieved from https://www.imf.org/en/Publications/WEO/Issues/2020/01/21/world-economic-outlook-update-january-2020 [5] International Monetary Fund. (2020). Russia: Selected Issues. Retrieved from https://www.imf.org/en/Publications/CR/Issues/2020/02/27/Russia-Selected-Issues-47243
- The Bank of Russia's projected growth for Russian GDP in 2025 and 2026 implies a slowdown in growth compared to the business and finance sector's previous years' expectations.
- Despite the IMF's downgraded forecast for Russia's economy, several Russian economists and institutions still expect growth rates that are higher than the IMF's estimates, suggesting a varied outlook within the finance and business community.
