20.06.2021

Experts estimate a drop in Russia’s GDP by 12%

Russia’s gross domestic product fell in April by 12%, the Ministry of Economic Development reported. The fact of the economic decline against the background of the self-isolation regime was not surprising, but its scale clearly exceeded negative expectations.

The main contribution to this decline was made by the consumer sector, which collapsed due to the self-isolation regime by almost a quarter. The monthly decline in GDP broke the statistics record set in May 2009 (-11.8%). There is a chance that by the end of the year GDP will still grow as economic activity in the country revives. But how much exactly – opinions differ. The Ministry of Economic Development believes that the decline by the end of the year will not exceed 5%, independent experts call the figure twice as large. “MK” found out the opinion of economists in this regard.

Igor NIKOLAEV, Director of the Institute for Strategic Analysis of FBK:

“The 12% failure in April reported by the Ministry of Economic Development is a lot. But I think the real decline was even greater. According to the ministry, industry fell by 6.6%, which does not look quite objective. If we assess the failure of the economy as a whole for the year, then I recall that in May another negative factor for GDP is included – a reduction in oil production under the OPEC + agreement. The oil industry is 20% of GDP. Therefore, in May the economic decline will be no less profound than in April. I do not think that according to the results of 2020, we will reach the indicator of minus 5-6%, which is forecasted by the Ministry of Economic Development and the Bank of Russia. It will be noticeably worse – minus 10%, or even more. It’s not obvious that in 2020 the economy will fall more than in crisis 2009, when GDP fell by 7.8%. ”

Sergey ZHAVORNOKOV, Senior Researcher, Institute of Economic Policy E. Gaidara:

“According to the forecasts of the Central Bank, by the end of the year the economy will fall by 5-6%. But much depends on the actions of the authorities. If all quarantine measures are not canceled and there will still be many restrictions, then everything will be very bad with the country’s GDP. The development of the economic situation depends on how quickly the authorities realize that all bans go to the minus, the fall in GDP will not stop. I think that by the end of the year the gross domestic product will drop by 7-8% – this is more than the government and the Central Bank predict. ”

Mark GOYHMAN, chief analyst of TeleTrade:

“April took, perhaps, the main blow of the coronacrisis. Retail trade has seriously declined. In its composition, non-food products showed a decrease of 36.7%. The situation with paid services became even more disastrous – a drop of 37.9%. The manufacturing industry decreased by 10%, light industry – by 23.1%, machine-building – by 34.3%. May promises to be not so deplorable, as there has been some weakening of the “non-working days” regime. But, nevertheless, it will most likely also show a significant drop in annualized GDP.

In general, in the second quarter, the decline may reach 10-10.5%. The third and fourth quarters will give a lower pace of decline, of the order of 5.5-6.5%, with some recovery in business activity, unless a large-scale “second wave” of the pandemic occurs. On the whole, over the year, the forecast of the Ministry of Economic Development about a 5% decline in GDP looks extremely optimistic, in reality the decrease may turn out to be much larger. In any case, Russian GDP will fall much stronger than the world. One of the reasons for this is the much smaller scale of financial assistance to sectors of the economy and the population to maintain demand, compared with the main countries facing “pandemic” attacks. This will lead to a very significant drop in real incomes of the population. ”

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