Global growth is weak. It slowed down to2.2 percent in the first half of 2016. While the Brexit votehas had a limited impact on global growth so far, growth inadvanced economies (AE) has been disappointing. Amidstexternal headwinds, the recession continues in Russia,although the pace of gross domestic product (GDP) declinehas slowed down. After a prolonged recessionary period,headline economic and financial trends and indicators arenow picking up. Fiscal tightening at the federal level mayalso adversely affect the performance of some regions. For2016, the authors project growth of the Russian economy at-0.6 percent, an improvement from earlier June forecast of-1.2 percent. This growth upsurge, however, is unlikely toturn the tide in terms of building a more diversifiedeconomy. While a detailed analyses of structural issues isbeyond the scope, bolstering investor sentiment towardsRussia by reducing policy uncertainty will help. Oneimportant step forward, particularly in light of erodingfiscal buffers with the reserve fund expected to be depletedin 2017, is a return of the medium-term fiscal framework.
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