The World Bank has improved its forecast for the Russian economy for 2020.
According to the organization's report released on Wednesday, December 16, the country's GDP will decline by 4%, and not 5%, as previously assumed.
The bank's analysts explain the revision of the assessment by a higher-than-expected level of economic activity in the third quarter of 2020.
If from April to June Russian GDP decreased by 8% compared to the same period in 2019, then from July to September the rate of decline slowed down to 3.4%.
“The measures taken to stimulate the economy (about 4% of GDP ...) along with the implementation of a stimulating monetary policy led to the fact that the main factor in the revival of economic activity was domestic demand,” the report says.
According to the experts of the organization, the budget policy pursued by the Russian government and a significant amount of financial reserves made it possible to limit the impact of the pandemic on the economy.
At the same time, given the country's small public debt, Russia has the opportunity to further increase spending on social support for the population and assistance to the regions.
As Olga Belenkaya, head of the macroeconomic analysis department of the Finam Group, told RT, the revival of business activity began after the weakening of quarantine restrictions.
At the same time, the economic recovery in Russia, as in most countries of the world, proceeded ahead of forecasts, the expert emphasized.
“At the moment, consumer demand for goods has practically recovered.
This was facilitated by a reduction in spending on foreign tourism, as well as the implementation of deferred demand - in the second quarter, the savings rate increased to 16.9% compared to 4.3% in the same period in 2019.
The government's anti-crisis measures related to maintaining employment also helped, ”the analyst added.
We will remind, earlier, to support the economy against the backdrop of the pandemic, the authorities approved several programs of financial assistance to business and the population.
In particular, we are talking about the provision of credit vacations, direct payments to families with children, soft loans to enterprises to ensure the salaries of employees, as well as tax breaks for companies and entrepreneurs.
In addition, since the beginning of the year, the Bank of Russia has lowered its key rate from 6.25 to 4.25% per annum - the minimum level for the entire post-Soviet period.
As Olga Belenkaya explained, the actions of the regulator also led to a noticeable decrease in rates on consumer loans, as a result of which borrowers were able to refinance debts on relatively comfortable terms.
The partial recovery in oil prices after the spring collapse also had a positive impact on the economy.
This point of view in an interview with RT was expressed by the head of the laboratory of the Institute of Applied Economic Research, RANEPA, Alexander Abramov.
Recall that in mid-spring, against the backdrop of a sharp decline in global demand for raw materials and an increase in production by countries exporting hydrocarbons, the price of Brent crude oil fell to a minimum in 21 years and at the moment fell below $ 16 per barrel.
However, in the summer, as a result of increased consumption of raw materials in the world and the resumption of the OPEC + deal, quotations exceeded $ 40 per barrel, and in December rose above $ 50.
“The outlined rise in oil prices has surpassed all expectations of market players.
The rise in prices for raw materials, in turn, had a positive effect on export earnings and Russia's trade balance, ”Abramov said.
© REUTERS / Maxim Shemetov
Grafting for growth
According to the World Bank experts, in the IV quarter of 2020, the second wave of the coronavirus pandemic slowed down the pace of business growth somewhat.
At the same time, according to the organization, large-scale vaccination against COVID-19 can accelerate momentum and put the economy "on the path of sustainable recovery and poverty reduction."
“Given the safety and efficacy of a commercialized vaccine, we can expect increased confidence among consumers and companies.
This will lay the foundation for a gradual resumption of economic growth in 2021 and 2022 at 2.6% and 3%, respectively, ”the report says.
A noticeable economic effect from vaccination of the population will begin to manifest itself in the second half of 2021, says Olga Belenkaya.
At the same time, already at the beginning of 2022, business and consumer activity should return to pre-crisis indicators.
This opinion was expressed in a conversation with RT by Georgy Ostapkovich, director of the Center for Market Research at the Institute for Statistical Studies and Economics of Knowledge, NRU HSE.
“The main tools that will help to restore activity are an increase in labor productivity, an increase in investment and the number of employees.
At the same time, the main potential of the economy is people, which is why it is so important now to maintain employment and support the incomes of Russians, ”the expert noted.
According to Renault Seligmann, Director of the World Bank in Russia, the country has opportunities to accelerate economic growth in the long term.
This requires increased participation in global supply chains for goods and services.
“These opportunities, in turn, can contribute to the achievement of Russia's national goals, which provide for the development of exports of high-tech products of the manufacturing industry and the agro-industrial sector, the creation of jobs in these sectors and the acceleration of the country's technological development,” Seligmann emphasized.