Get your free copy of Editor’s Digest
FT editor Roula Khalaf picks her favourite stories in this weekly newsletter.
The IMF has indefinitely postponed its first official visit to Russia since President Vladimir Putin ordered a full-scale invasion of Ukraine, following criticism from some of Ukraine’s European allies, Russian state media said.
Ahead of a visit to Moscow later this month, IMF leaders have scrapped plans to launch an investigation into the Russian economy this week because it is “not technically ready” for an investigation, Alexei Mozin, executive director for Russia, told TASS on Wednesday.
Mozin said the decision was taken at the last minute on Monday, when exploratory talks were supposed to have begun, and suggested the change in policy was prompted by European opposition to the reopening of ties between the IMF and Russia.
In the letter, seen by the Financial Times and signed by Poland, Denmark, Finland, Sweden, Lithuania, Latvia and Estonia, as well as the non-EU countries Iceland and Norway, the ministers spoke of “reputational risks” to the IMF and suggested such a visit would “diminish donor efforts and actions to support Ukraine through IMF efforts.”
The visit “will signal to the international community that the IMF is ready to return to normal operations and has taken a step towards normalizing relations with the aggressor country.”
The signatories also spoke at a meeting of EU finance ministers in Budapest on Saturday that turned into a “heated discussion” with IMF Managing Director Kristalina Georgieva, according to one participant, who defended her decision to allow the staff mission to proceed, according to a person familiar with the matter.
The IMF had no immediate comment on the allegations that it had suspended Mozin’s investigation.
The IMF had previously justified the visit, known as an Article IV consultation, as its obligations to Russia as a member state following a more “stabilized” economic situation in Russia.
Mozin announced the IMF mission earlier this month, the first visit to Moscow by a major international financial institution since the full-scale invasion began in 2022 and the IMF’s first visit to Russia since 2019.
Ksenia Yudaeva, a former deputy governor of the Bank of Russia, was nominated by Moscow to succeed Mozin on Nov. 1, but her appointment has not yet been confirmed by the IMF’s executive board. Mozin has worked at the IMF since Russia joined in 1992.
It is unclear how Yudaeva, who is subject to U.S. sanctions, will fulfill this role.
Russia’s GDP is expected to grow by up to 4 percent this year, according to the Russian central bank, despite unprecedented efforts by Western countries to isolate Moscow from the global economy and limit the Kremlin’s ability to fund the war in Ukraine.
Much of the growth was driven by record spending on Russia’s military, which stimulated strong real wage growth and a subsequent surge in consumer spending.
But to avoid Western sanctions, Russia keeps much of its government data about its economy and foreign trade secret, making it difficult for observers such as the IMF to get a full picture of the country’s economic situation.
Russia’s central bank warned last month that Russia’s “overheated” economy will slow sharply next year due to labour shortages and sanctions-imposed restrictions that limit the country’s ability to expand domestic production.
