On 12 September 2018 the IMF published a report following consultations in Russia under Article IV of the IMF’s articles of agreement.

The economy is recovering from the recession of 2015–16 owing to an effective policy response combined with higher oil prices. Economic growth is estimated to be 1.7% in 2018 but in the absence of structural reforms growth will go down to around 1.5% in the medium term. Downside risks to the economic outlook include geopolitical tensions.

The IMF report emphasises that structural reforms should be put in place to improve productivity and increase the supply of labor and capital. The IMF also encourages continued fiscal consolidation. The report backs the plans for pension reform to help offset negative demographic trends.

The report calls for the strengthening of tax compliance and reduction of tax expenditures. The government should ensure there is a growth friendly shift from social security contributions to consumption taxes. This can provide an incentive for more people to join the labour market, reduce the informal sector and help to attract new investment.

Higher economic growth requires stronger competition in domestic markets as well as a leaner state, and a stronger private sector. The IMF report encourages the government to strengthen transparency, accountability and governance standards in state owned enterprises and the corporate sector generally to improve the business environment. Productivity growth could be encouraged by further efforts to strengthen competitiveness, promote trade integration, and diversify exports.