MOSCOW (Reuters) – Russia’s economy could return to pre-crisis levels by the fall and overall gross domestic product growth this year could reach around 3.7%, chief executive Andrey Kostin said on Monday of the second largest bank in the country, VTB.

The International Monetary Fund has praised Moscow’s efforts to combat the economic effects of the COVID-19 pandemic, with increased borrowing and spending coupled with loose monetary policy resulting in a 4% drop in GDP.

While commodity prices, the lifeblood of the Russian economy, are generally on the rise due to renewed demand, GDP growth is estimated at around 3.7% this year, Kostin said during a virtual meeting of the World Economic Forum.

“We are reasonably optimistic about this and hope that by the fall the Russian economy will return to pre-crisis levels,” Kostin said.

Russian rating agency ACRA predicts growth close to Kostin’s expectations, with the ruble strengthening, provided there are no new sanctions against Moscow, a risk that has reappeared since the arrest of one. leader of the opposition.

The European Union will consider new sanctions against Russian individuals on Monday after more than 3,000 people were arrested on Saturday during protests demanding the release of Kremlin critic Alexei Navalny.

“Household mood in the context of rising inflation and increasing protest activity may require (state) support, and we do not rule out the return of additional budget spending on the agenda, ”Dmitry Dolgin, chief economist for Russia and CIS at ING Bank Eurasia, said in a note.

Russia’s inflation reached 4.9% in 2020 from 3.0% in 2019, above the central bank’s 4% target, and the budget deficit reached 3.8% of GDP, its largest in a decade.

Moscow previously announced plans to cut additional support to the economy to around 1% of GDP this year, from 4.5% in 2020.