Moscow--The International Monetary Fund on Tuesday predicted more pain for the Russian economy and gloom around the ex-Soviet region despite positive noises from Moscow that the worst of the crisis might be over.
Russia's economy is expected to shrink by 3.8 percent this year as sanctions imposed by the West over the conflict in Ukraine and low oil prices push the country deep into recession.
Across the wider region -- where ex-Soviet nations remain heavily dependent on the Russian economy -- the outlook looks grim too as Moscow's economic woes weigh down its neighbours.
"Economic performance in Russia was a bit stronger than expected in the second half of 2014, but the increase in geopolitical tensions, declining confidence and the repercussions of the oil price decline point to a more severe weakening of the outlook in the Commonwealth of Independent States (CIS) as a whole at the start of the year," the IMF said in its World Economic Outlook report.
The projection for the CIS region -- including Russia -- has dropped to minus 2.6 percent, some four percent down from an October estimate, with double-digit inflation expected in many countries.
"The Commonwealth of Independent States region is projected to slide into recession in 2015," the report said.
"For oil exporters, sharply lower oil prices and the significant contraction in Russia imply a much weaker outlook.
"For oil importers, the benefits from lower oil prices will likely be more than offset by domestic economic weaknesses and spillovers from the contraction in Russia through remittances, trade and foreign direct investment."
In the Caucasus and Central Asia, growth is predicted to slump to 3.2 percent in 2015 from 5.3 percent last year.
AFP
