IMF Expects Acceleration Of Russia's Economic Recovery By Mid 2021 Due To Vaccine Program

The International Monetary Fund (IMF) expects that the Russian economy will experience a boost in recovery by the middle of 2021 as the national COVID-19 vaccination program has already started, the fund said following Article IV consultations with the Russian authorities

MOSCOW (UrduPoint News / Sputnik - 09th February, 2021) The International Monetary Fund (IMF) expects that the Russian economy will experience a boost in recovery by the middle of 2021 as the national COVID-19 vaccination program has already started, the fund said following Article IV consultations with the Russian authorities.

"The ongoing recovery is projected to accelerate towards the middle of 2021 as the second wave of the pandemic recedes, COVID-19 vaccines become widely available, and oil production cuts are tapered in line with the OPEC+ agreement," the IMF said in a report on the consultations aimed to appraise Russia's economic and financial developments.

Even though the outlook for Russia is under significant uncertainty due to the second wave of COVID-19 and geopolitical risks, "the availability of an effective vaccine has reduced the risk of a protracted pandemic, and it is possible that confidence effects and pent-up demand will result in a stronger-than-projected recovery," according to the fund.

"All in all, the economy is projected to contract by 3.6 percent in 2020, followed by growth of 3 percent in 2021. Underlying this forecast is an assumption that a COVID-19 vaccine becomes widely available in 2021H2 in Russia and its trading partners, allowing for a rebound in domestic demand and exports," the IMF added.

Despite the positive economic outlook for next year, the pandemic-related crisis is likely to leave "economic scars" as Russia's real GDP in 2025 is forecast to be 2.5 percent below IMF's pre-crisis expectations.