IMF RESUMES RUSSIAN LOAN PAYMENTS…

The IMF has released the delayed January tranche of its $10.1 billion three-year loan to Russia and says it will make the February disbursement on schedule. The IMF says Russia has met its fiscal and monetary targets and made progress with structural reform. (Financial Times, February 10) The decision comes despite last month’s rise in consumer price inflation, continuing problems with tax collection, and a spate of unusually pessimistic pronouncements by Russian officials about the likelihood that the targets of the 1997 federal budget targets can be met.

The IMF apparently endorses Moscow’s argument that the recent increase in inflation was caused by seasonal, not structural, factors. At 2.3 percent, January’s inflation rate was the highest since March 1996, when the figure was 2.8 percent. (Itar-Tass, February 4) Assertions that this is a temporary phenomenon are supported by last year’s experience. In January 1996, inflation was 4.1 percent, but it fell sharply (to 2.8 percent) in February and continued to decline thereafter.

…but Questions Remain About Tax Reform and the Budget.