By Anton Usov
Russia is set to record negative GDP growth of 4.5 per cent in 2020 following the shocks caused by the coronavirus pandemic and the collapse of the OPEC+ agreement to limit oil production.
The European Bank for Reconstruction and Development (EBRD) reports this in its latest macroeconomic survey published today. The Bank is expecting the Russian economy to bounce bank in 2021 with GDP growth of 4.0 per cent subject to significant upside and downside risks.
According to the EBRD’s Regional Economic Prospects the substantial fall of oil prices and the slowdown in business activity contributed to Russia’s macroeconomic decline.
The report suggests that Russia’s National Welfare Fund can finance several years of budget deficits and the country has strong international reserves to cope with the crisis.
At the same time, future growth will depend on the path of oil prices and the extent and duration of social distancing measures.
Economies across the EBRD regions may contract on average by 3.5 per cent this year, with a rebound of 4.8 per cent possible in 2021, the report said, warning that the projections are subject to “unprecedented uncertainty”.