OREANDA-NEWS. Between 10 and 20 May 2016, the Bank of Russia hosted several meetings between the International Monetary Fund European Department and the Russian mega regulator’s executives. These meetings were held within the framework of annual consultations under Article IV of the IMF’s Articles of Agreement.

As a result of the meeting, the IMF Mission Concluding Statement was released, which contains the preliminary findings of IMF staff on the current situation in the Russian economy and its financial sector.

According to the document, the Russian economy continues to adjust to the dual shocks of lower oil prices and sanctions. The economic contraction was ‘shallower’ than previous recessions as the authorities’ economic package (a flexible exchange rate regime, banking sector capital and liquidity injection, limited fiscal stimulus and regulatory forbearance) cushioned the impact of adverse economic trends, helped restore confidence and stabilised the banking system.

Based on its assessment of the quality of financial sector regulation, fiscal, monetary and structural policies, the International Monetary Fund presented a number of recommendations and findings on the Russian economy’s recovery prospects.

According to the IMF, the Russian economy is set to contract by about 1.5%, but will rebound as early as 2017, posting a growth of about 1%.

The preliminary findings will be used for the draft IMF Staff Report 2016 as regards the Russian Federation, to be released in summer 2016 and thereafter considered by the IMF Executive Board.