International Monetary Fund upgrades Russia growth outlook, foresees return to growth in 2016

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The International Monetary Fund predicts a less severe recession for Russia and says the country's economy will return to growth in a "mild recovery" next year.

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Following a recent staff visit to Russia, the IMF says in a statement that it now predicts a 3.4 percent contraction in GDP this year and says "growth should resume" in 2016.

In its World Economic Outlook last month, the organization had predicted a 3.8 percent contraction this year, with GDP down a further 1.1 percent next year.

On Thursday, the IMF did not estimate the size of Russia's expected 2016 growth, but said medium-term growth would likely be 1.5 percent, accompanied by inflation dropping below 10 percent. "Structural bottlenecks" would impede long-term growth, the statement added.