The International Monetary Fund (IMF) has predicted a modest recovery for the Russian economy next year, with growth of 3.5 per cent, but warned that credit expansion would be heavily pressurised by bad bank loans.

Russia came out of recession in the third quarter, with a growth rate of 0.6 per cent, quarter-on-quarter. The rouble is currently standing at 37.6 against the euro.

The IMF cautioned, however, that generous liquidity support could be masking more serious underlying problems.

In the most recent statement on Russia they said that a tightening of monetary policy could prove problematic.

"We are concerned that, absent more forceful policy action, significant problems in the banking system could emerge once a normalisation of cyclical conditions forces the Central Bank of Russia (CBR) to tighten monetary policy," the IMF said.

The IMF advised the CBR to make use of the current stability to restore stringent regulatory requirements – chiefly through not extending the imminently expiring forbearance framework.

Higher spending in the 2009 and 2010 budgets has caused concern in the international finance body, leading to fears that the monetisation of large fiscal debts could put the rouble under pressure to weaken, stoking inflation.