IMF expects Russia’s GDP growth below 4% in medium term

The International Monetary Fund expects Russia’s gross domestic product to expand by less than 4 percent in the medium term, IMF Russia mission head Juha Kahkonen said on Tuesday.

The IMF has left Russia’s GDP forecasts for 2011 and 2012 unchanged at 4.8 percent and 4.5 percent respectively.

Kahkonen also said that Russia’s current economic policy was insufficiently ambitious.

The IMF recommended the country’s central bank tighten monetary policy and continue raising interest rates to fight inflation, Kahkonen said, adding that he liked the regulator’s foreign exchange policy.

Russia’s central bank has been tightening its monetary policy since last December after a six-month period of interest rate stabilization at record low levels.

The bank has been changing its foreign exchange policy since autumn, widening the floating corridor of the bi-currency basket which is used to manage the ruble’s real foreign exchange rate, and allowing the rate to float more freely.

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