{
  "title": "IMF Staff Concludes Visit to Russia",
  "publication": "IMF News, November 17, 2017",
  "sourceUrl": "https://www.imf.org/en/news/articles/2017/11/17/pr17448-imf-staff-concludes-visit-to-russia",
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  "summary": "Press Release No. 17/448",
  "publishDate": "2017-11-17",
  "sections": [
    {
      "heading": "Mission overview and macroeconomic outlook",
      "content": "- Press Release No. 17/448\n- Mission dates: visited Moscow during November 13–17, 2017\n- Mission leader: Ernesto Ramirez Rigo\n- End-of-Mission statement: views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board; this mission will not result in a Board discussion.\n- Key macroeconomic findings:\n  - \"A cyclical recovery in Russia is gaining pace after a two-year recession, with growth expected to reach around 2 percent this year, supported by higher oil prices and easier domestic financial conditions.\"\n  - \"Growth is likely to remain low in the medium-term, due to demographics, unaddressed structural bottlenecks as well as enduring sanctions.\"\n  - \"Inflation is likely to be just under 3 percent at end-2017, but it is expected to return to around the 4 percent target soon thereafter.\"\n  - \"The current account surplus is forecasted to improve due to higher oil prices and stronger global demand.\""
    },
    {
      "heading": "Fiscal policy assessment and recommendations",
      "content": "- Observations:\n  - \"The deficit reduction planned in the 2018-20 federal budget, underpinned by the new fiscal rule, is welcome.\"\n  - Adjustment rationale: warranted due to permanently lower oil prices and the need to increase savings in the oil fund in the face of potentially volatile oil prices.\n- Recommended revenue measures:\n  - Improve tax collection.\n  - Increase return on state assets, including dividend payout, to boost non-oil revenues.\n- Recommended expenditure measures:\n  - Rely on more permanent and better targeted measures, such as parametric reform to the pension system.\n  - Shift to means-testing of social assistance programs.\n  - Reduce subsidies and tax expenditures.\n  - Conduct detailed spending reviews to create fiscal space for infrastructure and human capital investment."
    },
    {
      "heading": "Monetary policy assessment and recommendations",
      "content": "- Observations:\n  - \"The Central Bank of Russia (CBR) has met its inflation target earlier than expected with the commendable steadfast implementation of their inflation targeting regime.\"\n  - \"Conditions are in place for further easing of monetary policy as inflation and inflation expectations have continued to decline since the last Article IV (see Press Release No. 17/270).\"\n- Recommendations and cautions:\n  - \"Further cuts in the policy interest rate should continue as the monetary stance remains tight but with due care to the potential reversal of temporary factors – low food prices and the strong exchange rate – which are partly responsible for the current low inflation.\"\n  - The CBR’s enhanced monetary framework beyond end-2017 is welcome."
    },
    {
      "heading": "Banking system stability and financial-sector recommendations",
      "content": "- Observations:\n  - \"The banking system appears stable, notwithstanding the recent rescue of two prominent banks and endemic weaknesses in many small banks.\"\n  - Lending activity is increasing, supporting a recovery in bank profitability.\n  - Non-performing loans (NPLs) appear to have stabilized, but asset quality remains a key weakness.\n  - There are risks that provisioning may be low in some banks.\n- Priority actions:\n  - Strengthen the ongoing asset quality review to ensure banks’ capital basis and support market confidence.\n  - Adopt and communicate a strategy to address weaknesses identified by the review and ensure transparency around the cost to taxpayers.\n- Bank resolution framework recommendations:\n  - The new bank resolution framework should shorten the process of open bank resolution and reduce balance sheet encumbrance, but areas of improvement remain.\n  - Consider replacing the CBR’s funding with federal government funds, provide for statutory bail-in consistent with international standards, and remove impediments to purchase and assumptions of problem banks by healthy banks."
    },
    {
      "heading": "Contact and communications",
      "content": "- IMF Communications Department — MEDIA RELATIONS\n- PRESS OFFICER: Wiktor Krzyzanowski\n- Phone: +1 202 623-7100\n- Email: MEDIA@IMF.org\n\nIMF Staff Concludes Visit to Russia — Press Release No. 17/448, November 17, 2017\n\n---\n\n\n References\n\n- Russian Federation and the IMF\n- Press Releases\n- PRESS CENTER\n- Press Release No. 17/270\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2017/11/17/pr17448-imf-staff-concludes-visit-to-russia"
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    "Published: November 17, 2017",
    "Press Release No. 17/448",
    "Mission dates: visited Moscow during November 13–17, 2017",
    "Mission leader: Ernesto Ramirez Rigo",
    "End-of-Mission statement: views are those of IMF staff and do not necessarily represent the views of the IMF’s Executive Board; this mission will not result in a Board discussion.",
    "Key macroeconomic findings:",
    "Observations:",
    "Recommended revenue measures:",
    "Recommended expenditure measures:",
    "Observations:",
    "Recommendations and cautions:",
    "Observations:",
    "Priority actions:",
    "Bank resolution framework recommendations:",
    "IMF Communications Department — MEDIA RELATIONS",
    "PRESS OFFICER: Wiktor Krzyzanowski",
    "Phone: +1 202 623-7100",
    "Email: MEDIA@IMF.org",
    "[Russian Federation and the IMF](http://www.imf.org/external/country/RUS/index.htm)",
    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[Press Release No. 17/270](http://www.imf.org/en/News/Articles/2017/07/10/pr17270-imf-executive-board-concludes-2017-article-iv-consultation-with-the-russian-federation)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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