IMF: end of recession in Russia, but Moscow’s economy is still in trouble

According to the International Monetary Fund, Russia will grow by 0.3% in 2023, denying recession forecasts. But the Russian economy continues to suffer. WATCH THE VIDEO

Surprise: Russia will soon emerge from recession. This is predicted by the International Monetary Fund, which in its estimates at the end of January revised upwards the growth of Russian GDP in 2023. According to the latest October forecasts, Moscow would have had to face a drop in the economy of 2.3 points according to the ‘IMF. While for the most recent World Economic Outlook the change will be positive, by 0.3%. This is the most important forecast revision among all the countries considered.

Because the Russian economy is holding up

Monetary Fund economists point out that “at the current level of the oil price ceiling, Russian crude exports should not be particularly affected”. In fact, the level of oil exports has remained stable in the last year according to Bloomberg, with a significant reorganization of buyers: China and above all India instead of European countries. This has ensured important revenues for the Russian Federation, even if the price of oil has fallen in the meantime. Above all of the Russian one, Ural, which in order to be marketed is sold at a discount compared to the rest of the crude oil on the market. On the natural gas front, which is less important for Russia than oil, exports have instead dropped considerably, as have financial revenues for Gazprom.

Confidence in recovery

After a severe recession that hit the country over the summer, the Russian economy is said to be recovering. According to Rostat, the official statistical agency, business confidence is reportedly returning to pre-war levels, even for the manufacturing sector most affected by Western sanctions. But Moscow’s difficulties remain in the medium term. Without Western technological products it will not be easy for the supply chains to keep up with international competition and also satisfy domestic demand. On the other hand, if one compares the IMF’s economic forecasts, not with the latest ones for October but with those prior to the conflict in Ukraineit is noted that among the large countries it is precisely the Russian Federation that has lost the most in terms of GDP growth.

Watch the entire episode of Sky TG24 Numbers on 31 January 2023 below.