The COVID-19 pandemic threatens to derail steady economic growth in Russia even in the best-case scenario. Experts at the Center of macroeconomic analysis and forecasts warn that the crisis will leave the imprint on all economic sectors. According to the best-case scenario, Russia’s gross domestic product could contract 2.3 – 2.5% this year and 0.5 – 0.8% in 2021. Economic growth is expected only in 2022 with the moderate expansion of 0.6 – 1.0%. If the worst predictions come true, the domestic economy could shrink 3% in 2020, extending its losing streak for a couple of years. It is likely to resume growth not until 2023.
To make the first option work out, the authorities have to adopt a comprehensive anti-crisis policy, implement efficient stimulus measures, and to shore up both households and businesses. Otherwise, Russia’s economy will be doomed to a severe downturn alongside galloping inflation of 7.5 – 8.0%. Foreign analysts also do not foresee reasons for optimism. Fitch Ratings, the US-based leading provider of credit ratings, downgraded its own forecast of Russia’s GDP. In March, the agency reckoned that the economy could slow down to 1% in 2020 from a 2% gain in the previous forecast. In April, Fitch Ratings again revised its forecasts, predicting a 1.4% slump. The reality is that the Kremlin has never cared about the welfare of the nationals. Such aloofness even at the pandemic peak amid multi-year lows of oil prices and Western sanctions overshadows prospects of the recovery at least in the medium term. No wonder, most Russian and foreign experts are braced for the worst-case scenario.