IMF Says Russian Economy Showed Signs Of 'Healthy Recovery,' But Warns Of 2nd Wave Impact

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IMF Says Russian Economy Showed Signs of 'Healthy Recovery,' But Warns of 2nd Wave Impact

MOSCOW (UrduPoint News / Sputnik - 24th November, 2020) The International Monetary Fund (IMF) on Tuesday welcomed the measures that Russia introduced to support the economy and business amid the COVID-19 pandemic, but warned that the positive dynamics was now under threat due to a sharp rise in infections.

"The economy was showing signs of a healthy recovery that is now under threat from a sharp rise in infections. The large contraction in the second quarter was not as severe as in most other G20 countries. Russia's strong fiscal, monetary, and macroprudential response to the crisis helped put a floor under the downturn and fostered a stronger-than-projected rebound of third quarter gross domestic product," the IMF said following Article IV Mission consultations with the Russian authorities.

The IMF went on to welcome the recent extension of the support measures in Russia and called on the authorities to "stand ready to do more.

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"The extension of tax deferrals for firms in sectors which are affected anew by restrictions is a good step. However, were the economic situation to weaken again as projected, the authorities should consider extending the deferrals further, as well as ensuring that the conditions to convert subsidized loans into grants remain compatible with underlying economic developments. Broadening the set of sectors and firms that receive support could also come into play if more restrictive lockdowns are instituted," the fund added.

At the same time, IMF projects that the Russian economy will contract by 4 percent this year and grow by 2.5 percent in 2021.

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