IMF国际货币组织全球-Russian-Federation_2019-Article-IV-Consultation_73页_1mb

IMF 2019 Article IV Consultation with the Russian Federation Summary

Core Content

The IMF conducted the 2019 Article IV consultation with the Russian Federation, evaluating the country's economic developments, policies, and future outlook. The consultation highlighted that Russia's economy is experiencing moderate growth under a sound macroeconomic policy framework, but structural constraints and the impact of sanctions continue to limit its long-term potential.

Key Economic Developments and Outlook

• Growth in 2018: Output grew by 2.3%, driven by exports, consumption, real wage growth, and higher labor demand. Investment also increased moderately.
• Inflation: Inflation rose in the second half of 2018 due to one-off factors like ruble depreciation and food/fuel price increases, rather than demand pressures. It is expected to return to the 4% target by early 2020.
• 2019 Growth Forecast: Growth is projected at 1.2%, due to lower oil prices and the impact of the higher VAT rate on private consumption. However, public sector spending under national projects is expected to support growth.
• 2020 Outlook: With the planned implementation of national projects, growth is expected to rise to 1.9% in 2020, mainly driven by domestic demand.
• Output Gap: The output gap was positive in 2018 at 0.2% of potential GDP but is expected to turn negative in 2019 and 2020.
• Fiscal Balance: The general government budget balance turned from a deficit to a surplus of 2.9% of GDP in 2018, driven by higher oil prices and improved revenue collection. It is projected to fall to 1.5% in 2019 and 2020.
• External Sector: The current account surplus reached 7% of GDP in 2018, supported by strong exports and FX reserves. The REER depreciated by about 71.5% in 2018, partly due to sanctions and FX purchases under the fiscal rule.

Policy Recommendations

Fiscal Policy

• Tax and Spending Shifts: Continue growth-friendly shifts in taxes and spending, maintaining fiscal discipline under the fiscal rule.
• National Welfare Fund (NWF): Avoid quasi-fiscal activities through the NWF and continue investing in high-quality foreign assets even after the liquid part reaches 7% of GDP.

Monetary Policy

• Monetary Easing: Continue monetary easing and build credibility of the inflation targeting framework.
• Communication Strategy: Improve the communication strategy to better anchor inflation expectations.

Financial Sector Policies

• Banking Sector Consolidation: Continue the consolidation of the banking sector and reduce state presence.
• Supervision and Regulation: Strengthen supervision and regulation, focusing on asset quality reviews and reducing related-party loans.
• Consumer Credit: Address risks from fast-growing credit to households and consider additional measures if lending growth does not moderate.

Structural Reforms

• Competition and Governance: Enhance competition by facilitating entry/exit and reforming public procurement. Reduce trade and FDI barriers.
• Fiscal Transparency: Improve fiscal transparency, including reporting on Public Private Partnerships (PPPs) and SOE governance.
• State Intervention: Roll back state intervention and improve SOE efficiency to increase potential growth.

Executive Board Assessment

• The Executive Board agreed with the staff's assessment, noting the importance of continued strong policy efforts and comprehensive structural reforms.
• They emphasized the need for deeper reforms to address the large state footprint, overbearing regulation, and institutional weaknesses.
• The fiscal rule is seen as a key tool for anchoring fiscal policy and shielding the economy from oil price fluctuations.
• The pension reform and national projects are welcomed, but their impact on potential output growth needs to be better quantified and efficiently implemented.

Risks and Challenges

• Geopolitical Risks: The threat of additional sanctions and global trade tensions could affect investment and economic stability.
• Domestic Risks: Accelerating retail credit growth could lead to a build-up of impaired assets.
• Structural Constraints: Supply-side bottlenecks, adverse demographics, and sanctions are major constraints on growth potential.
• Long-Term Growth: Without deeper reforms, long-term growth is projected to settle around 1.8%.

Summary of Key Indicators

Conclusion

The Russian Federation's economy is showing moderate growth under sound macroeconomic policies, but structural reforms and addressing the impact of sanctions are crucial for long-term growth. The IMF encourages continued fiscal discipline, improved monetary policy communication, and structural changes to enhance competition, reduce state intervention, and improve institutional frameworks.