On September 7, 2018, the Executive Board of the International Monetary Fund (IMF) concluded the Article IV consultation with the Russian Federation.
Russia's economy is recovering from the 2015–16 recession, thanks to the authorities' effective policy response and higher oil prices. Output increased by 1.5 percent in 2017 on the back of robust domestic demand, but short of expectations. Inflation has fallen well below the CBR's 4 percent target since July 2017, driven by a weaker-than-expected recovery, tight monetary policy, as well as temporary effects on food and energy prices.
Growth is projected at 1.7 percent in 2018, supported by rising credit and disposable incomes. Headline inflation is projected to bounce back during the second half of 2018 to 3.5 percent at year-end, supported by the ongoing domestic demand recovery, passthrough from the recent ruble depreciation, and the fading of temporary factors. The medium-term outlook remains muted, due to structural bottlenecks and the lingering impact of sanctions. Absent structural reforms, growth is expected to settle around 1.5 percent, while monetary policy stabilizes inflation around 4 percent by end-2019. The main risks to the outlook stem from geopolitical tensions as well as the new government's policy plans.