Russia’s Gross Domestic Product (GDP) is expected to contract by 3.4% in 2022, the IMF predicted in a report, much less than the sharp 6% decline expected in its previous forecast published in July.

“Russia’s economic contraction was less severe than expected, reflecting the resilience of crude oil exports and domestic demand with increased support from fiscal and monetary policies and the restoration of confidence in the financial system”, the agency detailed in its report.

Western countries, since the start of Russia’s intervention in Ukraine on February 24, have taken up a salvo of sanctions against Russia meant to strangle it financially and economically. But according to the IMF, Russia’s Central Bank has since adopted the “right position” of pursuing a “restrictive monetary policy”, in particular severely restricting currency exchange.

35% GDP recession for Ukraine

And the IMF noted that by the time “European and American companies cut back on purchases of Russian oil”, it “has been diverted to China and India at lower prices than Brent”, thus strongly supporting Russia’s growth.

For 2023, the IMF anticipates an additional recession of the Russian economy by 2.3%, but weaker than what the organization forecast in July (-3.5%). The IMF is also still forecasting a 35% GDP recession for Ukraine by 2022, largely due to the conflict with Russia. The IMF did not make a forecast for Ukraine for 2023.