Russian economy set for 'moderate' growth: IMF

15th September 2011, Comments 0 comments

The International Monetary Fund estimated Wednesday that Russia's economy would grow moderately through 2012, citing the political uncertainty of next year's presidential elections.

"The short-term outlook is for only moderate growth," the IMF said in its annual report on the Russian economy.

The IMF projected gross domestic product growth at an annual rate of 4.8 percent in 2011, slowing to 4.5 percent in 2012.

That subdued pace, even with high oil prices, compares with growth above 7 percent during the 2000-2007 period, the Washington-based institution noted.

According to the IMF, Russia will have trouble attracting foreign capital at levels seen before the global recession "amid political uncertainty, a still-fragile banking system, and increased risk aversion by investors."

Russia has scheduled legislative elections on December 4, and a presidential election on March 4.

"The current account has strengthened aided by high oil prices, but net capital outflows persist likely owing to political uncertainty in the run-up to the 2012 presidential elections and the poor business climate," the IMF said.

The IMF board of directors, at a September 9 meeting, called on resource-rich Russia to take measures to enhance the private sector.

"Directors underscored the importance of improving the business climate to bolster private investor activity and diversify the economy."

© 2011 AFP

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