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Economic Update

According to Analytical Credit Rating Agency, in the context of the spread of the new coronavirus the Russian economy may decline by 4-4.5% this year and recover to growth of 2-3% in 2021 in the baseline scenario. The duration of economic recovery critically depends on how the banking system will be able to close liquidity gaps in the affected labor-intensive sectors, as well as, on whether the state will be able to increase support for consumer demand. The pessimistic scenario predicts a drop in real GDP by 7–7.5% and the beginning of economic recovery is expected only in 2022. The economic growth in 2021 will be 0.5%, and in 2022 it will accelerate to 3.9%. According to the optimistic scenario, the decline in GDP in Russia this year will be 0.8%, and in 2021 it will be replaced by an increase of 1.8%.

After Central Bank of Russia measures for the local currency stabilisation, rouble gained some 5% of its value against USD in the first half of April, and slow recovery trend remains, with the Central Bank official rate of 74.53 Rub per USD on April 29 compared to 78.80 average rate of the last week of March.

According to the Federal State Statistics Service, consumer prices for the period from April 14 to 20 increased by 0.2% on average.  The head of the national savings bank of Russia, Sberbank, predicts the rate of inflation to stay below 3% until the year of the end.

Since the introduction of the self-isolation regime, due to the coronavirus, the unemployment rate in Moscow increased to 0.66%, up from 0.4%.

According to a research study by BCG and Romir, more than two-thirds of Russians predict an economic recession and many believe that “the worst is yet to come”. In Moscow, 44% of respondents felt financial insecurity, while in the regions this figure has already reached 47%. Regardless of age, all Russian consumers will reduce their spending in the next six months. Expenses will decrease by 15% on average for most product categories, with entertainment and leisure being hit the hardest. Over the next six months, 65% of Russians will reduce their spend on air travel and 63% will reduce their spend on hotel accommodation, and 53% - on intercity trains.

Update on COVID-19 in Russia

As of April 27, Russia had an increase of 6,198 new coronavirus infections bringing the country’s official number of cases to 87,147. Russia has now surpassed China to become the world's ninth most-affected country amid the pandemic. The peak of the pandemic in Russia is predicted to be in May. The number of deaths remains quite small, with at 794. More than 3 million coronavirus tests have been made so far.

In his address on April 28, President Putin prolonged non-working days till May 11. Russia is expected to lighten the coronavirus lockdown measures gradually from May 12.

The number of the infected by region












Source: Meduza

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