Page 45 - RusRPTOct20

output last spring, our latest ​BOFIT Forecast for Russia​, which was released last week, sees GDP contracting by 4% this year and growing by slightly over 2% p.a. in the next two years. The possibility of weaker economic performance remains large, however, as there is still much uncertainty related to the outlook for covid-19 and the oil markets.
Private consumption in Russia shrank sharply due to strict measures to control the spread of the coronavirus pandemic, sharp drop in incomes and increased unemployment. Consumption has recovered briskly in latest months as covid-related restrictions have been lifted. Fixed investment has declined and new fixed investment is supressed by uncertainty over economic trends and a massive drop in corporate profits. Russia has resorted to public sector support to blunt the impacts from the covid shock. Public sector spending should increase sharply this year, but next year the supportive effect of public spending will fade.
Russia's foreign trade has experienced a substantial contraction this year. The export volumes of certain key products, however, started to increase already in the spring, thanks in part to rapid recovery of the Chinese economy. Russian imports have been hurt by weak demand and ruble depreciation. Both exports and imports are expected to show modest growth next year with reviving demand domestically and globally.
The conservative scenario of Russia’s macroeconomic outlook suggests GDP growth of 2.7% in 2021, and 2.9% in 2022, with further stabilization at the level around 2.5% ​amid persisting lower business activity in a number of sectors, according to the country’s social and economic development outlook for 2021 and the planned period of 2022 and 2023 presented by the Economic Development Ministry. According to the base case scenario of the outlook, Russia’s GDP will contract by 3.9% in 2020, and grow by 3.3% in 2021, 3.4% in 2022, and by 3% in 2023.
45 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com