bne IntelliNews -

In an update to October's World Economic Outlook, the International Monetary Fund (IMF) foresees a 3% and 1% GDP contraction in Russia in 2015 and 2016 respectively, down from 0.5% and and 1.5% growth previously. 2014 growth is estimated at 0.6% of GDP.

Russia is among the major oil exporters whose activity is expected to be weaker because of the sharp drop in oil prices. Specifically for Russia, the much weaker outlook is influenced also by the direct and indirect effects of geopolitical tensions. The sharp slowdown and ruble depreciation are also severely weakening the outlook of other CIS group states, the IMF notes.

Recently the EBRD said it expects 4.8% recession in Russia in 2015. Moody's expects a 5.5% GDP decline and Fitch forecasts that at an average oil price of $70/barrel in 2015, Russia's economy will decline by 4%.

The IMF projected Russia's 2015 GDP contraction at 2.9% vs an estimated 0.7% growth in 2014. The outlook is based on an  average oil price forecast of $60/barrel. In 2016 the recession will turn into stagnation, the IMF believes: Russia is expected to “barely get back” into positive territory with 0.1% growth.

The IMF's forecast is milder than the outlook forecast by Russia's ministry of economic development and its central bank, which at the end of 2014 predicted a 3% and 4.5%-4.7% GDP decline in 2015 respectively, given an average oil price of $60/barrel.

Currently the official forecast by the ministry of economic development is for a 0.8% contraction at an $80/barrel oil price. However, the finance ministry is already basing some of its unofficial fiscal estimates at an oil price of $50/barrel and the central bank said it is preparing a $40/barrel outlook.