IMF projects Russian economy to grow 3.2%, in spite of sanctions over attack on Ukraine

The International Monetary Fund (IMF) says Russia will grow by 3.2 percent this year surpassing the United Kingdom (UK) France and Germany.

The IMF said according to BBC monitored by Zambia Monitor on Friday that oil exports have “held steady” and government spending had “remained high” contributing to growth, the IMF.

Overall, it said the world economy had been “remarkably resilient.”

“Despite many gloomy predictions, the world avoided a recession, the banking system proved largely resilient, and major emerging market economies did not suffer sudden stops,” the IMF said.

The group said that the forecasts it makes for growth the following year in most advanced economies, more often than not, have been within about 1.5 percentage points of what actually happens.

Despite the Kremlin being sanctioned over its invasion of Ukraine, the IMF upgraded its January predictions for the Russian economy this year, and said while growth would be lower in 2025, it would still be higher than previously expected at 1.8 percent.

Petya Koeva Brooks, deputy director at the IMF said investments from corporate and state owned enterprises and “robustness in private consumption” within Russia had promoted growth alongside strong exports of oil.

Russia is one of the world’s biggest oil exporters and in February, the BBC revealed millions of barrels of fuel made from Russian oil were still being imported to the UK despite sanctions.

Away from Russia, the IMF downgraded its forecasts across Europe and for the UK this year, predicting 0.5 percent growth this year, making the UK the second weakest performer across the G7 group of advanced economies, behind Germany.

The G7 also includes France, Italy, Japan, Canada and the US.

Growth is set to improve to 1.5 percent in 2025, putting the UK among the top three best performers in the G7, according to the IMF.

However, the IMF said that interest rates in the UK would remain higher than other advanced nations, close to four percent until 2029.

The group expects the UK to have the highest inflation of any G7 economy in 2023 and 2024.

Chancellor Jeremy Hunt said the IMF’s figures showed that the UK economy was turning a corner.

“Inflation in 2024 is predicted to be 1.2 percent lower than before, and over the next six years we are projected to grow faster than large European economies such as Germany or France – both of which have had significantly larger downgrades to short-term growth than the UK,” he said.

Economists at the IMF warned that if the Israel-Hamas conflict escalates further in the Middle East it could lead to rising food and energy prices around the world.

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