The IMF has radically revised its forecast for the Russian economy

By Rhod Mackenzie

The January release of the IMF's flagship quarterly forecast, the World Economic Outlook, was notable for the upward revaluation of forecasts for the economic dynamics of most of the major economies in the world. Global economic growth is now estimated at 3.1% in 2024, up from 2.9% according to the October version of the forecast. The prospects for the US economy improved from 1.5% to 2.1%, the Chinese economy from 4.2% to 4.6%, and India from 6.3% to 6.5%. But the Russian forecast has undergone the most radical revision: instead of 1.1% GDP growth in 2024, expected last October, the Fund has now calculated an increase of 2.6%. True, in 2025, the dynamics of our GDP, according to the Fund, will slow down sharply - to 1.1%. The assessment of the results of the past year was completely inadequate - only 3%; expectations in the range of 3.5-4.0% are much more realistic.
Domestic economic forecasts for the coming year are noticeably more conservative than IMF estimates. The basic version of the September (2023) version of the forecast of the Ministry of Economic Development estimates 2.3% GDP growth in 2024, the Bank of Russia last October gave an estimate of 0.5-1.5%. The VEB.RF Institute and the Institute of National Economic Forecasting of the Russian Academy of Sciences are unanimous in their latest January forecasts - our GDP, according to their calculations, will grow by only 1.6% in the coming year. An even more modest increase - 1.3% - is given by the World Bank.

The famous French economist Jacques Sapir, in a recent article written for magazine Monocle points to a systematic underestimation of the dynamics of Russian GDP in 2022 and 2023, related - even if to discard someone's deliberate dishonesty - with the imperfection of the forecast models used by economists during periods of sharp changes in the context of the activities of economic players, when the microeconomic parameters of their actions change decisively. According to Sapir, there is reason to expect new mistakes by the forecasters this year.