Business

The IMF expects Russia to grow faster than all major economies

A prominent international organisation has predicted that Russia's economy would outpace all other countries, including the United States, in terms of growth this year.

According to the International Monetary Fund (IMF), Russia is projected to see a growth rate of 3.2% this year, which is notably higher than that of the United Kingdom, France, and Germany.

According to the IMF, oil exports have maintained a stable level, and government expenditures have stayed at a high level, both of which have contributed to economic development.

In general, it said that the global economy has shown remarkable resilience.

The IMF said that contrary to several pessimistic forecasts, the global economy successfully averted a recession, the financial sector has shown significant resilience, and critical developing market economies did not experience abrupt halts.

The International Monetary Fund (IMF) is a global institution with 190 member nations. Businesses use it to strategise investment decisions, while central banks, like the Bank of England, rely on it to inform their choices about interest rates.

The organisation asserts that their growth estimates for the following year in advanced countries have often been accurate within a margin of around 1.5 percentage points.

Although the Kremlin has faced sanctions due to its invasion of Ukraine, the International Monetary Fund (IMF) has revised its January forecasts for the Russian economy this year. The IMF predicts that although growth will be weaker in 2025, it will still exceed prior expectations at 1.8%.

According to Petya Koeva Brooks, deputy director at the IMF, development in Russia has been driven by investments by corporate and state-owned firms and a robust oil export. Additionally, the resilience of private consumption has contributed to this expansion.

Russia, a major global oil supplier, continues to provide the UK with millions of barrels of gasoline produced from Russian oil despite the imposition of sanctions.

Outside of Russia, the International Monetary Fund (IMF) has revised its predictions for economic growth downwards for Europe and the UK this year. The IMF now predicts a growth rate of 0.5% for the UK, positioning it as the second lowest performer within the G7 group of advanced countries, with Germany being the only country doing worse.

The G7 comprises France, Italy, Japan, Canada, and the US.

According to the IMF, the UK's growth is expected to increase to 1.5% in 2025, which would place it among the top three countries with the highest economic performance in the G7.

Nevertheless, the International Monetary Fund (IMF) has projected that interest rates in the United Kingdom will continue to be comparatively high, hovering around 4%, compared to other developed countries, until the year 2029.

The organisation anticipates that the United Kingdom will see the most significant inflation among the G7 economies in 2023 and 2024.

Chancellor Jeremy Hunt said that the International Monetary Fund's data indicated that the UK economy was changing positively.

"The forecast for inflation in 2024 indicates a decrease of 1.2% compared to previous levels. Additionally, our projected economic growth over the next six years is expected to outpace that of major European economies like Germany or France. It is worth noting that Germany and France have experienced more significant downgrades to their short-term growth prospects than the UK," he said.

Middle East Conflict

 

Economists at the International Monetary Fund (IMF) cautioned that a further escalation of the Israel-Hamas conflict in the Middle East has the potential to increase global food and energy prices.

The persistent assaults on vessels in the Red Sea and the continuing conflict in Ukraine may potentially have an impact on the hitherto "exceptionally robust" global economy, as said.

The report said that lower-income nations will be disproportionately affected by a probable increase in food, energy, and transportation expenses.