Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

IMF Changes GDP Forecast to 6.5% Drop

The International Monetary Fund cut its forecast for Russia's economic growth in 2009 to -6.5 percent from -6 percent and said the country "urgently" needs a plan for banks' bad assets, the IMF's Russia mission said in a statement Monday.

"The swing in growth is much larger in Russia" than its peers in the Group of 20, the statement said. "This susceptibility to the global business cycle and to the attendant collapse in commodity prices reflects, to some extent, longstanding policy weaknesses."

Russia's economy contracted 9.5 percent in the first quarter and may shrink as much as 8 percent this year, Economic Development Minister Elvira Nabiullina said last month.

IMF mission head Poul Thomsen met with central bank Chairman Sergei Ignatyev on his latest visit, as well as Finance Minister Alexei Kudrin and First Deputy Prime Minister Igor Shuvalov who coordinates the government's anti-crisis program.

"The Central Bank does not yet have a full picture of the situation in the banking system," the IMF statement said. The Central Bank needs to stress test small and medium-sized lenders and plans for recapitalizing banks must be "formalized," it said.

Kudrin warned in March that the economy may face new shockwaves from the global crisis in the form of bad loans as companies struggle to raise funds.

The IMF called for a "more comprehensive assessment and determined policy," otherwise banks may "struggle to adjust balance sheets for a prolonged period, with credit and counterparty concerns stifling credit expansion."