In the statement made by the IMF, it was reported that the 4th article consultation on Russia was completed.
In the statement, which pointed out that Russia entered the Kovid-19 crisis with a strong policy framework despite low growth, measures to control the spread of the epidemic and global It was noted that disruptions in the oil market triggered a significant economic contraction in the first half of 2020.
The statement said that the Russian economy, which shrank by 3.1 percent last year, proved to be more resilient than many other emerging economies.
EFFECTIVE VACCINE APPLICATION IS “KEY”
In the statement that the Russian authorities benefited from the wide policy area to provide a strong and coordinated fiscal, monetary and macro-prudential response to the crisis, the policy rate was reduced by 200 basis points. It was pulled to a record low of 4.25 percent, liquidity support was provided to banks, capital buffers were relaxed, credit classification to banks and provi It was reminded that legal obligations were imposed on the issue.
The statement pointed out that low oil prices combined with geopolitical tensions caused a depreciation of the exchange rate and a slight increase in inflation, and it was noted that the current account surplus contracted due to low oil prices and weak oil demand.
Continue In the statement that the economic recovery is expected to accelerate towards the middle of 2021, it was emphasized that the outlook is subject to significant uncertainties, geopolitical risks also overshadow the outlook, and an effective vaccination application is “key”.
CALL TO REDUCE THE INTEREST RATE.
As long as the economic situation is fragile, the authorities are urged to be vigilant and ready to expand support if necessary, underlining that if downside risks arise, Russia should use its important fiscal space to provide stronger support. < br>
In the statement, the Central Bank of Russia It was pointed out that in order to prevent the flation from falling below the target in 2021, it was pointed out that the interest rates should be reduced in the coming months and a 50 basis point reduction is necessary.
The statement, which also includes economic forecasts for the Russian economy, said the country’s economy was 3 percent this year, It is projected to grow by 3.9 percent, 2.1 percent in 2023, 1.8 percent in 2024, 1.8 percent in 2025 and 1.8 percent in 2026.
4. WHAT IS ITEM CONSULTATION?
According to the IMF’s founding agreement, each member country must be regularly audited within the framework of Article 4 Consultation Study.
The IMF will guide the economic administrations of the member countries and fulfill its oversight duty on the international financial system. It conducts detailed reviews (usually once a year) on the economic developments of each member.
These studies are called “Article 4 Talks” as they are carried out within the scope of Article 4 of the IMF Foundation Agreement.