IMF Europe Director: "Russian Economy Overheating, Outlook Uncertain"

Alfred Kammer, Director of the European Department at the International Monetary Fund (IMF), stated that the Russian economy is currently overheating, and its medium-term outlook remains uncertain.

At a press conference held at the IMF headquarters in Washington, Kammer said, "The Russian economy is facing capacity constraints... it is overheating." According to Kammer, the medium-term economic growth prospects in Russia remain uncertain for the IMF, but the Fund has adjusted its assessment of the country's potential GDP growth in light of the impact of the sanctions regime.

In early October, the IMF raised its forecast for Russia's economic growth in 2024 to 3.6% and lowered its 2025 expectations to 1.3%. According to the Fund, the decline in GDP growth in 2025 may be due to a slowdown in private consumption and investment, driven by easing tight conditions in the labor market and an increase in real incomes.

On Thursday, the IMF released a forecast maintaining the country's GDP growth (1.2%) and inflation (4%) expectations for 2026. Russian Economic Development Minister Maxim Reshetnikov commented on the IMF’s projections for the country's economic dynamics in 2025, noting that the Fund did not account for the implementation of proactive economic policy measures, such as providing labor resources, capital, and technology to the economy.

According to the Economic Development Ministry's forecast, the country's GDP will grow by 3.9% this year, 2.5% in 2025, 2.6% in 2026, and 2.8% in 2027. The ministry's forecast suggests that inflation will be at 7.3% by the end of 2024, 4.5% in 2025, and at the target level of 4% in 2026 and 2027.