Russian economy recovering faster than expected from pandemic – IMF

Russia’s first-quarter GDP growth shows the economy is recovering from the Covid-19 pandemic at a quicker pace than expected, according to the International Monetary Fund (IMF).

The country’s economy is forecast to grow 4.4% in 2021, the IMF said in its report on global economic development prospects, raising the estimate by 0.6% compared to its previous report in April.

“In the case of Russia, we have seen faster recovery. So the first-quarter GDP growth has come in stronger than we were expecting and because of that, it has led to an upgrade,” IMF Chief Economist Gita Gopinath said at a briefing on Tuesday. She noted, however, that the figures may change, as the progression of the Covid-19 spread is hard to predict.

“There are still challenges ahead, the pandemic is not over, we have seen cases going back up, vaccination rates are progressing but still the coverage is incomplete. So, there is much more that needs to be done on that front,” Gopinath said.

Another IMF official points out that the economic recovery in Russia is happening earlier than anticipated.

“As already mentioned, we are seeing signs of that strength, and it’s not just the manufacturing sector but also the reopening of the economy and the strength of the service sector,” the head of the IMF’s Strategy, Policy, and Review Department, Petya Koeva Brooks, said.

Earlier this month, the Russian Ministry of Economic Development and Trade also raised its forecast for the growth of the country’s economy in 2021, despite new administrative restrictions on business activity due to the third wave of the pandemic. However, the ministry’s expectations are lower than those of the IMF, with GDP forecast to reach 3.8%.

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