News Column

IMF: Russian Economy Faltering Amid Crisis

July 24, 2014

Washington (Alliance News) - Russian economic prospects have eroded amid Moscow's role in the crisis in neighbouring Ukraine, the International Monetary Fund said Thursday.

The conflict in eastern Ukraine, where pro-Russian separatists are fighting the Kiev-based government, contributed to a sharp drop in expectations for Russia.

In a quarterly revision of its World Economic Outlook, the Washington-based crisis lender lowered its 2014 forecast for Russia by 1.1 percentage points to just 0.2% growth; the 2015 project was slashed from 2.3% to 1%.

Regional instability, the flight of foreign capital and Western efforts to punish Moscow's alleged meddling in Ukraine were all factors.

IMF chief economist Olivier Blanchard called the Russian slowdown "mainly a deterioration of business confidence, which has been aggravated by geopolitical tensions. The result has led to large capital outflows, and a near freeze in investment decisions."

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Source: Alliance News

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