Covid-19: Russian economy in trouble, new measures planned

Elvira Nabiullina, Governor of the Russian Central Bank. REUTERS

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The economic consequences of the coronavirus pandemic are now being felt worldwide. In Russia, the decline in economic activity is already very significant. And the authorities expect a deep recession. 

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From our correspondent in Moscow , Daniel Vallot

Many figures have been circulating for several weeks in Moscow on the coming recession, but this is the first time that the Russian Central Bank has tried a prediction. And for the monetary institution, the decline will be very significant: from 4 to 6% of GDP in 2020: "  The situation has changed radically  " since March, explains the Bank in the press release published on Friday.

And in fact, in a few weeks, the Russian economy has seen all its indicators go into the red. Decline in industrial production, shutdown of entire sectors of the economy, decline in spending and consumption: the effects of the pandemic are already being felt - with an aggravating factor for the Russian economy: its dependence on oil exports. The collapse in crude prices is of course very bad news for Russia. Faced with the looming rout, the Central Bank of Russia opts for a slight drop in its key rates, which go from 6% to 5.5%.

For its part, the Russian government is considering new measures to support the economy. For the time being, many observers believe that the funds released by the authorities to support Russian businesses and families in difficulty are insufficient.

One thing is certain: after the years of stagnation that followed the annexation of Crimea, the economic recovery hoped for by Vladimir Putin will not take place. On the contrary, it is a major crisis looming, comparable to those suffered by Russia in 2014 or in the late 2000s.

► Also listen: In Russia, the economy falters in the face of the coronavirus

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