IMF worsens outlook for Russian economy

According to IMF estimates, Russia's GDP is expected to contract by 1% against earlier projections of 0.6%.

Russia, which continues to adjust to low oil prices and Western sanctions, is expected to remain in recession in 2016, according to the IMF.

The IMF notes that "other economies of the Commonwealth of Independent States are caught in the slipstream of Russia's recession and geopolitical tensions, and in some cases affected by domestic structural weaknesses and low oil prices; they are projected to expand only modestly in 2016 but gather speed in 2017."

The IMF has also revised down its growth forecast for a number of other countries. Thus, the economic growth in Brazil is projected to declineby 3.5% in 2016, that is higher by 2.5 percentage points than earlier expected. The GDP growth in Saudi Arabia is projected to slow down by 1 percentage point to 1.2% in 2016 and to 1.9% in 2017.

Read alsoRussia's ruble hits new historic maximum as oil prices add pressureThe IMF cut its projections for U.S. economy growth to 2.6%, from 2.8% projected earlier.

Global growth, currently estimated at 3.1% in 2015, is projected at 3.4% in 2016 and 3.6% in 2017, according to the report.

Lower oil prices strain the fiscal positions of fuel exporters and weigh on their growth prospects, while supporting household demand and lowering business energy costs in importers, especially in advanced economies, where price declines are fully passed on to end users. Though a decline in oil prices driven by higher oil supply should support global demand given a higher propensity to spend in oil importers relative to oil exporters, in current circumstances several factors have dampened the positive impact of lower oil prices, according to the IMF.

Read alsoRussia sees growing demand for "experts on sanctions" - mediaThis year, oil prices may fall further by 17.6%, the IMF forecast. The assumed price based on futures markets (as of December 10, 2015) is $41.97 in 2016 and $48.21 in 2017.