BAKU, Azerbaijan, July 5. Russian economy is rapidly slowing and the risks are rising, Julie Kozack, Director, Communications Department at the International Monetary Fund (IMF), said during a briefing, Trend reports.
“Russian economy is now slowing sharply. Inflation is easing, but is still high. And Russia, like many countries, is affected by high risks and uncertainty. In our April WEO, we projected growth to slow to 1.5 percent in 2025. Recent developments since April suggest that growth may even be lower. And we will, like for many countries, we will be updating our forecast for Russia in the July WEO update, which will come in a few weeks,” she said.
With respect to monetary policy, Kozack noted that inflation remains high.
“Annual inflation is above the Central Bank of Russia's target. But based on our April forecast, we do expect inflation to come down and to decline over time. In April, we had expected inflation to return to target in the second half of 2027. And so, we see that for the Central Bank policymaking is going to need to balance the fact that inflation is still high, and that unemployment is still very low in Russia, with the fact that the economy is rapidly slowing and that risks are rising. So that will be the challenge for the Central Bank that we see in its making of monetary policy in the near future,” she explained.
Kozack pointed out that the slowdown in Russia reflects a few things.
“First, tight policies. The other factors are cyclical factors. So, coming off of a period of overheating, you often see a cyclical slowdown. And that's what we're seeing in Russia. And also, the fact that oil prices are lower, which is also affecting Russia as well. And we also do see some impact on the economy from tightening sanctions,” she said.