MOSCOW: The International Monetary Fund said yesterday that Russia is already in recession and slashed its growth forecast for 2014 citing the effect of the Ukraine crisis on investment.
“If we define recession as negative growth in two quarters in a row, then Russia from that point of view is experiencing recession,” IMF economist Antonio Spilimbergo was quoted as saying by the Interfax news agency.
The IMF has lowered its 2014 growth forecast for Russia to 0.2 percent from the 1.3-percent figure it issued on April 8, Spilimbergo said. “There is a risk that it could be lowered further.”
Russia’s economic growth has been falling for the last few years but the Ukraine conflict with its recurrent threat of military action in Europe has seen massive capital flight and the ruble fall to levels not seen since the 2008 global financial crisis.
So far the economic strains have not affected President Vladimir Putin’s popularity, with the independent Levada polling agency yesterday putting his approval rating at 82 percent.
The IMF’s decision came taking into account “the difficult current situation and the significant level of uncertainty related to geopolitical tensions and sanctions,” Spilimbergo said. “This all has a very negative effect.”
“We expect that the fall in investments that already took place in 2013 will increase further this year,” he said.AFP
