Page 29 - RusRPTMay20

3.0​ ​Macro Economy 3.1 ​Macroeconomic overview
Economy Ministry data suggest economic expansion continued in March​. The Economy Ministry published its assessment of economic growth in 1Q20. According to its data, Russia’s GDP increased last quarter by 1.8% y/y – the economy continued to expand by c0.8% y/y in March as well, albeit by a significantly lower pace (estimated growth in 2M20 stood at 2.3% y/y).
Moderate rise in unemployment, thus far. Currently Russia has 3.7mn unemployed, according to Minister of Labor Kotyakov. This implies an unemployment rate close to 5% vs 4.7% in March. While unemployment will continue to rise in the coming months – Kotyakov said the number of job seekers could stand at 5mn by YE20 – these figures suggest that the situation on the labor market could remain relatively stable
One month of the quarantine may cost 1.5-2% of GDP for the domestic economy​, Central Bank chief Elvira Nabiullina said on April 3. "The experience of other countries shows that one month of the quarantine at the country scale may cost 1.5-2% of annual GDP for the economy, but the overall effect will depend on the length of restrictive measures," Nabiullina said. Adverse effects for the Russian economy will concentrate in the second quarter of this year, she added.
The total cost of the anti-crisis support package, including the latest measures announced by the President Vladimir Putin, amount to over RUB2 trillion ($27bn), ​up from the previously pledged RUB1.4 trillion, the Minister of Economic Development Maxim Reshetnikov estimated, as reported by Reuters. "This figure could easily grow to 3% of GDP, as the financial support from regional budgets might increase," Sberbank CIB estimated, noting that a decision to postpone the tax payments (excluding VAT) of SMEs for six months and introduce a very gradual scheme of tax return (not less than a year) might cost regional budgets an amount well exceeding the RUB200bn of regional support proposed by Putin.
The losses for Russia’s economic sectors, which are worst-hit by the coronavirus pandemic could reach RUB17.9 trillion ($239bn)​, while up to 15.5mn people could lose their jobs, a new macroeconomic study by the National Rating Agency (NRA) says, according to Izvestia. In its new forecast, the NRA relies on a basic scenario, where the GDP and real wages would decline nearly 3% and the dollar rate would surge to RUB85-90 to the US currency. Experts believe that this optimistic scenario, where economic growth would continue, and a pessimistic scenario, characterized by a deep fall, are highly unlikely.
Russia’s economic growth will depend on both the price of oil and how much it produces​. While analysts are struggling to come up with numbers, Oxford Economics came up with a heat map of these three variables.
29​ RUSSIA Country Report​ May 2020 ​ ​www.intellinews.com