Friday, 3 August 2012

IMF on Russia: some key points

In its most recent statement on Russia "IMF Executive Board Concludes 2012 Article IV Consultation with the Russian Federation", IMF concludes amongst other as follows:

  • "[IMF] Executive Directors welcomed Russia’s recovery from the 2008–09 crisis and noted that the output gap is estimated to have been closed. The challenge in the short term is to manage domestic demand in order to avoid overheating and in the medium term to fully realize Russia’s significant growth potential by maintaining macroeconomic stability, further strengthening the policy framework, and making decisive progress on structural reforms".

  • "Important priorities are the prompt passing of legislation on consolidated supervision and connected lending and the expansion of the central bank’s powers to use professional judgment".

  • "Directors underscored that structural reforms are crucial to increase investment, diversify the economy, and raise potential growth. Welcoming Russia’s accession to the WTO, they encouraged the authorities to seize this opportunity to strengthen the momentum for reforms and make the business environment more predictable by strengthening the rule of law, reducing corruption, and scaling back state involvement in the economy, including through transparent privatization of state-owned companies".

No details are provided as to what "structural reforms" entail in detail and in general terms we take note of the IMF pushing, in Russia as well, for more powers to be granted to the central bank. You would expect them to. Here's the full notice.

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