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. Last Updated: 07/27/2016

IMF Urges Quicker Reforms

WASHINGTON -- The International Monetary Fund on Wednesday said investors' doubts about Russia's commitment to market-orientated reforms and a perception of increased state intervention had slowed investment growth.

In a statement issued at the end of annual economic talks in Moscow, the IMF said the drop in investment growth and lower oil export volumes had slowed Russian growth since mid-2004, despite high oil prices.

"In the mission's view, boldly launching long-delayed structural reforms -- not least administrative and civil service reforms -- and ensuring the tax administration and other state agencies act in a transparent and even-handed manner are crucial for reassuring investors and restoring growth momentum," the IMF said.

The IMF said planned increases in pension benefits and other expenditures of more than 0.75 percent of GDP will add to budget pressures.

Therefore it was becoming "a matter of urgency" to resist spending more oil revenue profits, while no further amendments to the 2005 budget should be considered, the fund added. "In line with this, the floor on the amount of resources in the [oil] stabilization fund that cannot be spent should be lifted to facilitate saving in full the oil windfall, except for that part that is allocated to the prepayment of external debt," the IMF said.

Russia should also increase exchange rate flexibility, the fund said. It said unless the Central Bank was prepared to reduce foreign exchange interventions and allow faster ruble appreciation if inflation deviates from the target, inflation was unlikely to fall in 2005.

n The government has provided the IMF with a breakdown of proceeds from the December auction of Yuganskneftegaz transferred to the federal budget, the IMF said Thursday.

The federal treasury provided documents showing that 211.4 billion rubles ($7.6 billion) gained in the $9.3 billion sale reached the budget in January, while the remaining amount of $1.7 billion, arrived in February, Interfax reported.

"We got data on the proceeds that the federal budget has received from the Yuganskneftegaz sale," an IMF spokeswoman said.

(Reuters, MT)