IMF cuts Russia's growth prospects

IMF reduces its forecast for Russia's economic growth

Associated Press

MOSCOW (AP) -- The International Monetary Fund has reduced its estimate of Russia's economic growth, citing weak investment and global market turbulence.

The IMF said Tuesday it expects Russia's GDP to grow at 1.5 percent in 2013, the third consecutive downgrade since early this year when the fund put that figure at 3.7 percent. The IMF said capital outflows have been spurred by pressure on the exchange rate, the local bond market and equities.

The Russian government forecasts a 1.8 percent GDP growth this year.

The IMF expects Russia's GDP growth of 3 percent next year, if the global economic environment improves.

The IMF Executive Board praised Russia's tight fiscal policies, but encouraged it to promote more efficient use of resources and higher investment to raise its growth potential and reduce vulnerabilities.

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