Russia’s high interest rates policy is keeping he country on track to meet its long-term inflation target, but the economy still faces challenges to improve growth in the absence of major reforms, the International Monetary Fund has said.
In findings from its latest healthcheck on the Russian economy, the IMF said inflation would fall to 6.5 per cent in 2016 and continue to drop in subsequent years, reports Max Seddon in Moscow.
But the economy is set to contract by 1.5 per cent this year before growing 1 per cent in 2017, the IMF said.
Elvira Nabiullina, the central bank governor, is keeping rates “moderately tight” at 11 per cent in an attempt to reach its inflation target of 4 per cent, noted the Fund. Russia’s economy ministry however, wants GDP to grow at 4 per cent, a task many see at odds with Ms Nabiullina’s high rates policy.
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