IMF improves Russia’s 2024 GDP growth forecast

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The economy is projected to expand much more rapidly this year than previously expected

The IMF significantly has raised its growth forecast for the Russian economy in 2024 in its latest World Economic Outlook update released on Tuesday. 

The Washington-based institution now expects Russian GDP to grow by 2.6% this year, a sharp increase from its October forecast of 1.1% growth. The forecast for 2025 was also increased by 0.1 percentage point from the October estimate, to 1.1%. The upward revision of Russia’s economic growth forecast “[reflects] carryover from stronger-than-expected growth in 2023 on account of high military spending and private consumption, supported by wage growth in a tight labor market,” according to the IMF.

“It is definitely the case that the Russian economy has been doing better than we were expecting and many others were expecting,” the IMF’s chief economist, Pierre-Olivier Gourinchas, told the Financial Times, commenting on the report.

The IMF also projected growth in emerging and developing Europe to pick up from an estimated 2.7% in 2023 to 2.8% in 2024, before declining to 2.5% in 2025. “The forecast upgrade for 2024 of 0.6 percentage point over October 2023 projections is attributable to Russia’s economy,” said the report.

The Russian Economy Ministry expects the country’s GDP to expand 2.3% this year, following 3.5% growth in 2023, according to the preliminary reading.

The head of the Russian central bank, Elvira Nabiullina, said last month that GDP is expected to have grown by around 2.7% in 2023, driven by strong domestic demand. For 2024, the central bank’s current projection is of 0.5-1.5% growth. This estimate, however, will be reviewed in February, Nabiullina said, adding that it is important to make “timely decisions” to cool excess demand and reduce inflation. 

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