IMF chief Christine Lagarde
Photo: Brian Lawless/PA Images/TASS
Although Russia’s GDP will decline this year, when converted at purchasing power parity it will grow by 0.5%, follows from the updated forecasts of the IMF. Previously, the Fund had expected a decline on this indicator the second year in a row
According to the updated forecasts of the International monetary Fund, Russia’s GDP in PPP terms in 2016 will increase by 0.54 percent in 2015 (from $3,72 trillion to $3,74 trillion). In previous versions of forecasts from April 2016, the IMF suggested that Russia’s GDP at PPP will decrease for the second consecutive year (from $3,72 trillion to $3,68 trillion). Thus, the IMF raised its estimate of Russia’s GDP in PPP terms this year by 1.6%.
Measuring GDP at purchasing power parity gives the possibility to make international comparisons of economies. Russia on this indicator remains in sixth place, ahead of Brazil but behind Germany (see table). First place in the world is China (with a forecast $of 21.27 trillion this year). China overtook the US in 2014 and will increase his lead in 2016 to $2.7 trillion — about the size of the French economy. In third place is India, whose GDP in PPP terms will increase this year more than anyone in the top twenty largest economies by 9 percent.
In the top-20 only Brazil’s GDP (PPP) for the year decrease (2%). Russia, though will avoid a second consecutive annual fall, will show the weakest momentum after Brazil, and its share in world production will continue to decline (from 3.26 to 3.15% and 3% by 2018).
Russia’s GDP in PPP terms will exceed $4 trillion in 2018 — a year earlier than assumed in the April version of the forecasts. Per capita, Russia’s GDP in PPP terms in 2016 will grow from $25,96 thousand to $26.1 thousand
“Capital” of Russia’s GDP in constant prices in rubles — in 2016 will shrink by 0.8% in 2017 increase by 1.1%, the IMF predicts. It’s better than previous estimates (minus 1.2% and plus 1% respectively). At a press conference in connection with the October forecast economist of the IMF Jean-Marie Milesi-Ferretti noted that the monetary policy conducted in Russia, helped to limit the negative effect of sanctions and falling oil prices.
PPP GDP is an important indicator in measuring the welfare state in comparison with other countries. The final cost of domestically produced goods and services this indicator is calculated on the basis of purchasing power parity ratio of national currency to US dollar based on purchasing power. The IMF expects GDP in PPP on the basis of studies of the International comparisons program, which exists under the auspices of the world Bank.