Page 6 - RusRPTFeb21
P. 6
1.0 Executive summary
For an outlook of what bne IntelliNews expects this year read our 2021 Outlook
Russia finished 2020 with a milder than expected 3.1% contraction, according to preliminary data from the Economics Ministry released on February 1, which was still the biggest slump since 2009, Russia’s Federal Statistics Service said.
Russia suffered a smaller contraction than most major economies in 2020 after the government opted not to reimpose a lockdown in the second half of the year. Growth in eh summer was driven by a pick up in consumption.
Economists forecast a 3.7% drop in a Bloomberg survey. The Economy Ministry had projected a decrease of 3.9%, the Central Bank of Russia (CBR) between 4% and 6% and the International Monetary Fund (IMF) -4.1%. Investment banks were more upbeat with BCS Global Markets forecasting a contraction of -2.7 and Renaissance Capital -2.5%.
Most of the economic hit came in the first half, when the government imposed a strict lockdown and global oil demand slumped due to travel restrictions.
The summer saw a rapid rebound after the lockdown restrictions were lifted, driven largely by surging consumption. However, in September as the second wave of the coronavirus epidemic made itself felt, growth slowed again as many Russians chose to self-isolate voluntarily.
Russia’s balance of payments remained in a healthy state in 2020 despite the pandemic, a major decline in economic activity and capital flows. Analysts forecast significant improvement in the country’s external accounts in 2021.
In 2020, Russia posted a current account surplus of $32.5bn, according to preliminary data released by the CBR yesterday. This is twice lower than a year ago ($64.8bn in 2019), but still is a positive achievement, given the recession and a spike in capital outflows caused by the pandemic. Last year, exports from Russia fell 21.5% y/y to $329.5bn while imports were down 5.7% y/y ($2401.bn). The volume of foreign direct investment fell by a massive 20 times to $1.4bn from $28.9bn a year earlier. Net private capital outflows doubled to $47.8bn from $22.1bn in 2019.
6 RUSSIA Country Report February 2021 www.intellinews.com
