The spread of coronavirus in Russia has led to a sharp decline in consumer demand and retail sales. On Tuesday, April 14, Vladimir Putin said at a meeting on economic issues.
“The most sensitive problem for companies - both here and in other countries - is a reduction in demand. So, the volume of retail trade, retail sales in Russia in April decreased by more than 35%. This indicates how sharply, almost simultaneously, the market contracted. And for many enterprises this is a really big shock, ”the Russian leader emphasized.
According to him, the epidemic and forced quarantine measures negatively affected business activity and the labor market. The situation provoked a violation of trade and economic ties, the president emphasized. At the same time, small and medium-sized businesses, as well as the service sector, suffered the most, the head of state noted.
According to experts, after the introduction of the self-isolation regime and the announcement of non-working days in April, the consumption volumes in Russia decreased markedly.
“The drop in retail sales occurred for obvious reasons: now, in the previous regime, only pharmacies and grocery stores mainly work. The rush demand of the first weeks of quarantine has subsided, people have gathered a “strategic supply” and now they are buying only what is needed, ”said Finam analyst Alexei Korenev in an interview with RT.
It should be noted that over the past day in Russia 2774 new cases of infection with coronavirus infection COVID-19 were detected in 51 regions of the country. Thus, since the beginning of the epidemic in the Russian Federation, there are 21,102 registered cases of the disease in 82 regions.
Since the beginning of the month, many enterprises have been forced to suspend work. This situation has also caused a marked decrease in energy consumption in the country.
“Another integral indicator of the state of the economy is the consumption of energy resources. There is also dynamics, unfortunately, negative. For the first 12 days of April, our electricity consumption decreased by 5% compared to the same period last year. That is, enterprises began to use their capacities less, ”added Vladimir Putin.
As the president emphasized, the pace of lending to the real sector of the economy also slowed down. Thus, many investment plans of companies, development and renewal programs of enterprises were “put on hold”.
“One should pay attention to the fact that over the first week of April, the number of new mortgage loans sharply decreases in many, including systemically important banks. This cannot but affect the construction industry and related sectors, ”the president added.
To help the economy
However, measures already announced by the authorities should support the economy in an epidemic, told Pavel Sigal, First Vice President of the All-Russian public organization of small and medium-sized enterprises “Support of Russia”.
“In this situation, the most effective measures to support small and medium-sized businesses should be measures to freeze tax payments and defer repayment of loans. This is what the state is doing now - the announced two packages of measures provide for such assistance tools, ”the expert emphasized.
- © Sputnik / Alexei Druzhinin / Kremlin via REUTERS
At the end of March, Vladimir Putin proposed reducing the size of insurance premiums for small and medium-sized enterprises (SMEs) from 30% to 15% and giving a half-year delay for all taxes except VAT. Meanwhile, on April 8, as an additional measure of assistance to business, the president proposed to give a delay of six months in the payment of insurance premiums and to provide an annual installment plan for tax payment enterprises.
“There should not be a situation when in half a year companies will have to immediately, at one time pay off their accumulated debts. This is what worries the business community the most; it would have an extremely negative impact on doing business. Therefore, we are restructuring such a debt. It will be possible to extinguish it smoothly, monthly, in equal installments for at least a year after the end of the delay, ”Putin emphasized.
According to analysts, the initiative will mitigate the financial burden on enterprises, as well as avoid a large number of company bankruptcies and rising unemployment. At the same time, experts highly appreciate the likelihood of introducing new stimulus measures in the near future.
“Additional fiscal support measures, credit concessions, as well as reducing administrative barriers and the number of inspections of supervisory organizations will help businesses recover. If the business recovers quickly, the number of jobs and demand will increase, ”emphasized Alexey Korenev.
In total, the amount of funds allocated by the government to combat the consequences of the epidemic is about 1.2% of GDP. This was announced by the head of state during a working meeting of members of the Supreme Eurasian Economic Council.
It should be noted that in addition to helping business, the authorities also approved a number of measures to support the Russians. So, on April 3, Vladimir Putin signed a law on granting credit holidays to citizens who find themselves in a difficult situation in connection with the spread of coronavirus. We are talking about both consumer and mortgage loans.
According to the law, borrowers will be able to apply to the bank for credit vacations for up to six months if their income for the previous month decreased compared to the average monthly income for the previous year by at least 30%. According to experts interviewed by RT, the measure introduced will reduce the impact of the coronavirus pandemic on the economy and maintain the quality of life of Russians at an acceptable level.
“Uncertainty in the employment market strengthens the need for savings and cutting costs, and mortgage payments can make up a significant part in their structure. All this increases the debt burden on citizens. At the same time, with the launch of the credit vacation program, Russians have the opportunity to balance the family budget and more smoothly survive the decline in real disposable income, ”said Alexander Bakhtin, investment strategist at BCS Prime, RT.