IMF warns Russia on slowing growth

14th June 2011, Comments 0 comments

Russia's economic growth will slow unless the Kremlin implements badly needed structural reforms, the International Monetary Fund warned on Tuesday.

"Unless policies are strengthened, growth is likely to taper off to less than 4 percent in the medium term," the Washington-based multilateral institution said in a statement.

Russia, whose economy grew 4.1 percent in the first quarter of 2011, remains overly dependent on oil exports and is vulnerable to sudden drops in petroleum prices, the IMF said.

"Broader governance reforms are needed, including strengthening of property rights and the rule of law, and reform of the judiciary system and civil service," the IMF said.

The fund also urged Russia to rein in its budget deficit and tighten monetary policy to combat inflation.

In recent years, Russian growth has lagged behind its peers in the BRICS group of countries -- especially fast-growing Brazil and China -- which many analysts blame on widespread corruption and a poor investment climate.

Last week, the World Bank issued a report warning that Russia was failing to innovate and notably criticizing its economic policies in the 2000-2008 period, when Vladimir Putin was president.

During those years, the state took control of large swathes of the economy and Russia became much more dependent on oil and gas exports.

© 2011 AFP

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