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. Last Updated: 07/27/2016

IMF Says Turbulence May Hit Russia in 2008

WASHINGTON -- High oil prices, capital inflows and productivity gains will help the Russian economy dodge fallout from turbulent global financial markets this year, but it may see an impact in 2008, the IMF said Wednesday.

Forecasting 7 percent growth in 2007, the International Monetary Fund said in its semiannual World Economic Outlook that this pace may moderate to 6.5 percent next year, trimming 0.3 percent from a forecast it made back in July.

"Risks to growth are tilted to the downside, owing to a possible stronger impact of financial market turbulence on the availability of foreign and domestic financing, as well as the impact of slower global growth on commodity prices and export demand," the IMF said. "If growth were to slow down significantly in Russia, demand for imports from smaller countries in the region [Armenia, Georgia, Moldova, the Kyrgyz Republic, and Tajikistan] and flows of private remittances to these countries are likely to be adversely affected."

The IMF noted that strong demand in the Commonwealth of Independent States could also have a downside in terms of inflation, which remained high, and trade balance problems. "Besides pushing up prices, robust demand growth in the region is also weakening the external current account positions, which nonetheless remain in a solid surplus in most energy-exporting countries," it said.