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IMF cuts Russia’s 2016 GDP growth forecast to contraction of 1%

The IMF has cut its 2016 GDP growth forecast for Russia to a contraction of 1%, as compared with its earlier projection for a contraction of 0.6%. According to the International Monetary Fund, the Russian economy will resume growth in 2017, with its GDP growing at the rate of 1%.

"Russia, which continues to adjust to low oil prices and Western sanctions, is expected to remain in recession in 2016. Other economies of the Commonwealth of Independent States are caught in the slipstream of Russia's recession and geopolitical tensions, and in some cases affected by domestic structural weaknesses and low oil prices; they are projected to expand only modestly in 2016 but gather speed in 2017," says IMF.

Meanwhile, the IMF has lowered the 2016 global growth forecast by 0.2 percentage points to 3.4%, and 2017 growth projection by further 0.2 percentage points to 3.6%. It stated that advanced economies are likely to continue having a modest and an uneven rebound with a gradual additional thinning of output gaps.

"Risks to the global outlook remain tilted to the downside and relate to ongoing adjustments in the global economy: a generalized slowdown in emerging market economies, China's rebalancing, lower commodity prices, and the gradual exit from extraordinarily accommodative monetary conditions in the United States. If these key challenges are not successfully managed, global growth could be derailed," says IMF.

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