The International Monetary Fund (IMF) released a report about the economic situation of Russia. The country has been in a recession since 2014, after the economic sanctions of the Western Countries imposed on Russia. According to the report of the IMF, Russia has been doing well in the struggle with recession and should see economic growth of 1.4% this year.
Russian economy which is heavily dependent on oil exports was hit hard when crude prices started to crash in 2014. The economic sanctions imposed by Western countries as punishment for Russia taking control of Ukraine’s Crimea region caused Russian economy to collapse.
As the value of Russia’s ruble decreased and many people were hit hard by austerity policy of the government. After 2 years and after many economic and political crisis, Russian economy seems to be in a better situation.
In the recent IMF report it is stated that the economy, exiting a two year recession, is recovering well due to the effective policy of the Russian authorities. Oil prices reached the value of 50 dollars per barrel while it decreased to 26 dollars a barrel at the same period of last year. Of course this increase has been directly related with the production cuts introduced by OPEC producer countries such as Saudi Arabia and Russia itself.
Russia went to the IMF with a plan to decrease its budget deficit, rebuild foreign currency reserves, privatize some state-owned companies and clean weak banks from the financial system. However, Russia also stated that the unfavorable effects of economic sanctions could still prevent investment. Russia’s government required to have a much wider reform agenda in order to reduce the economy’s dependence on oil and other commodities. The IMF expects Russia’s economy to grow by about 1.5% in the next years.