The International Monetary Fund (IMF) will resume its annual economic consultations with Russia for the first time since 2021, a move that has sparked sharp criticism from several European nations.
“Now that the economic situation is more settled, Article IV Consultations with Russia are resuming, as I said at the beginning, in line with the obligations of both the Fund and the member country,” Kozak said.
The IMF’s decision to send a team to Russia drew a critical reaction from Lithuania, Latvia, Estonia, Finland, Sweden, Iceland, Denmark, Norway, and Poland. The finance ministers of these countries sent a letter to IMF head Kristalina Georgieva expressing “strong dissatisfaction with such IMF plans.”
The IMF and all its member countries—which include Russia—have an agreement under which IMF experts carry out periodic economic assessments. These Article IV missions were suspended in Russia following the launch of what the Kremlin calls a “special military operation” in Ukraine.
“In the case of Russia, since the invasion of Ukraine in 2022, the economic situation has been exceptionally unsettled, which has made it difficult to anchor Article IV consultations, especially thinking about the outlook and policy frameworks for both the near- and the medium-term,” Kozak said.
Since the invasion of Ukraine, Russia has faced significant sanctions from Western nations, particularly targeting its energy and financial sectors. Despite this, Russia’s economy has remained remarkably resilient. According to recent figures from Moscow’s Federal State Statistics Service, the economy grew by 4 percent annually in the second quarter of 2023, driven in part by increased manufacturing activity and military production.
Some economists have questioned the reliability of official Russian economic data, with the country reportedly using clandestine methods to export oil and circumvent sanctions.
In their letter to the IMF chief, the finance ministers of the nine European countries opposed to the Article IV mission claimed that any data Moscow would provide to IMF assessors would be censored to show Russia unfazed by Western sanctions, making the assessment inaccurate.
“We urge all international financial institutions, including the IMF and its management, to continue refraining from the activities involving the aggressor state and not to resume dialogue as long as Russia continues its war of aggression against Ukraine,” the letter stated.
Economic growth in Russia has been fueled in part by large-scale government spending on arms production amid the war in Ukraine, which has led to soaring wages in a tight labor market.
Russia’s Finance Minister Anton Siluanov said at the beginning of September that Moscow expects gross domestic product (GDP) to climb 3.9 percent in 2024, up from 2.8 percent estimated in an April forecast.
