The growth forecast for the Russian economy in 2023 has been upgraded again by the International Monetary Fund (IMF), which issued its new World Economic Outlook with revised figures on Tuesday.
In a sizable increase from its April estimate of 0.7%, and July forecast of 1.5%, the IMF now predicts the Russian GDP will increase by 2.2% in 2023.
In the report, the IMF said, “The rise in growth reflects a substantial fiscal stimulus, strong investment, and resilient consumption in the context of a tight labor market.”
It still falls short of the 2.8% expansion of the GDP which is being forecast by the Russian Economy Ministry for 2023. The growth will follow 2022’s 2.1% contraction, after the Russian trade environment was sent into disorder by the sudden imposition of sweeping Western sanctions which temporarily disrupted its energy exports and cut it off from Western financial mechanisms for settling cross-border trade obligations.
The IMF forecast comports roughly with the upper estimate set by the Bank of Russia, which predicted that the economy would grow by 1.5-2.5% this year.
Even as the IMF upwardly revised their 2023 forecast for the Russian economy, it downgraded its 2024 forecast from 1.3% to 1.1%. In doing so it underscored the “mixed effects” of Western sanctions on the country’s oil exports, which it predicts will remain consistent, as the discount over the Brent benchmark will shrink. Currently the Urals blend is priced in trading above the EU and G7’s $60 per barrel price cap.
