https://sputnikglobe.com/20231108/russian-economy-recovered-steadily-inflation-could-undermine-europes-financial-stability---imf-1114808109.html
Russian Economy Recovered Steadily, Inflation Could Undermine Europe’s Financial Stability - IMF
Russian Economy Recovered Steadily, Inflation Could Undermine Europe’s Financial Stability - IMF
Sputnik International
The Russian economy has recovered steadily after the Western governments imposed comprehensive sanctions but the medium-term prospects are less encouraging, the International Monetary Fund (IMF) said in a report.
2023-11-08T05:44+0000
2023-11-08T05:44+0000
2023-11-08T05:44+0000
economy
russian economy under sanctions
imf
international monetary fund
inflation
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As a result of the positive economic developments, the IMF revised its GDP growth forecast for Russia in 2023 to 2.2% from 0.7% in April, the report said. "The turnaround was initially achieved by improved terms of trade related to high energy prices, followed by a substantial increase in military spending later last year and earlier this year that boosted aggregate demand, supported consumption, and encouraged investment," the report said. However, the IMF decreased its GDP growth forecast for 2024 to 1.1% from 1.3% in April, while maintaining its outlook for 2025 unchanged at 1%, the report said. "Medium-term prospects are less encouraging. Higher fiscal spending will generally allow for a temporary and not a sustained pickup in growth, given its composition," the report said. The IMF found that the record-low rate of unemployment, the depreciation of the ruble, the rise in inflation and the Bank of Russia’s sizable interest rate hike of 350 basis points in August indicate that the Russian economy reached the edge of its potential, the report added.Inflation Looming Over EurozoneThe International Monetary Fund (IMF) warned that inflation and stagnant growth could undermine financial stability and debt sustainability in Europe.“A stagflation scenario with higher inflation and stagnant growth is a key risk that could lead to adverse macro-financial spillovers to financial stability and debt sustainability,” the IMF said in its new Regional Economic Outlook (REO) for Europe.The fund pointed out that downside risks to growth are currently dominating.The IMF also expressed concerns over additional commodity price shock and more persistent core inflation. Those potential risks could force central banks to tighten monetary policy more than expected, thus lowering growth, it added.The report did not rule out that more backward-looking wage settings and tighter labor markets could increase inflation in some countries.The regional economy also faces high risks to financial stability, the report said. Larger-than-expected interest rate hikes and weakening of the region’s property market could cause systemic financial instability, the IMF added.
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russian economy under sanctions, imf, eurozone, economic growth, sanctions
russian economy under sanctions, imf, eurozone, economic growth, sanctions
Russian Economy Recovered Steadily, Inflation Could Undermine Europe’s Financial Stability - IMF
WASHINGTON (Sputnik) - The Russian economy has recovered steadily after the Western governments imposed comprehensive sanctions but the medium-term prospects are less encouraging, the International Monetary Fund (IMF) said in a report.
As a result of the positive economic developments, the IMF revised its GDP growth forecast for Russia in 2023 to 2.2% from 0.7% in April, the report said.
"The turnaround was initially achieved by improved terms of trade related to high energy prices, followed by a substantial increase in military spending later last year and earlier this year that boosted aggregate demand, supported consumption, and encouraged investment," the report said.
3 November 2023, 11:39 GMT
However, the IMF decreased its GDP growth forecast for 2024 to 1.1% from 1.3% in April, while maintaining its outlook for 2025 unchanged at 1%, the report said.
"Medium-term prospects are less encouraging. Higher fiscal spending will generally allow for a temporary and not a sustained pickup in growth, given its composition," the report said.
The IMF found that the record-low rate of unemployment, the depreciation of the ruble, the rise in inflation and the Bank of Russia’s sizable interest rate hike of 350 basis points in August indicate that the Russian economy reached the edge of its potential, the report added.
Inflation Looming Over Eurozone
The International Monetary Fund (IMF) warned that inflation and stagnant growth could undermine financial stability and debt sustainability in Europe.
“A stagflation scenario with higher inflation and stagnant growth is a key risk that could lead to adverse macro-financial spillovers to financial stability and debt sustainability,” the IMF said in its new Regional Economic Outlook (REO) for Europe.
The fund pointed out that downside risks to growth are currently dominating.
29 September 2023, 13:14 GMT
The IMF also expressed concerns over
additional commodity price shock and more persistent core inflation. Those potential risks could force central banks to tighten monetary policy more than expected, thus lowering growth, it added.
The report did not rule out that more
backward-looking wage settings and tighter labor markets could increase inflation in some countries.
The regional economy also faces high risks to financial stability, the report said. Larger-than-expected interest rate hikes and weakening of the region’s property market could cause systemic financial instability, the IMF added.
