Page 6 - RusRPTOct20

The upshot is that the government is planning to continue to run a de facto austerity programme where it will do enough to keep the economy going but the economy will at the same time be hamstrung and growth will be undynamic as a result.
Economic gyrations in August
President Vladimir Putin has the Russian consumer to thank for pulling the country's economy from the brink of recession in the summer. Consumer demand helped spur a faster-than-expected recovery over the summer in large part because border closures ensured Russians spent money at home. Stimulus measures introduced during a two-month lockdown that started in late March also worked to good effect. A mortgage subsidy programme has fuelled acitivty in the real estate sector and the government said in September that it will be extended into the autumn. Other subsidies and tax payments delays (not relief) will start to expire in the autumn slowing growth.
The government is in the midst of setting its 2021-2023 budget and plans to cut spending across the board on fixed items by 10% as well as rise tax rates, as we is reported in this month’s issue below.
Still, the Russian economy is doing better than its peers and indeed better than most European countries and the Economics
The Economy Ministry revised up its estimate for this year's contraction to 3.9% from 4.8% after data in September showed a jump in economic activity since lockdown measures were lifted in May. That came after an 8% contraction in the second quarter of this year and surprised the staff at the Central Bank of Russia (CBR). It helped that services and small businesses, sectors that were hit hardest by global lockdowns, play a relatively minor role in Russia's total output.
A recovery in consumption-driven branches picked up over the summer, but then began to fade slightly in August, while primary production supported the overall economy.
Although the Russian economy has recovered somewhat from its spring lows, output in most branches remains well below pre-COVID levels.
However, the overall share of taxes in GDP will remain virtually unchanged
(10.9% in 2020 and 11.1% thereafter). This means that the Economics Ministry
expects to compensate for the reduced taxes in SMEs, IT and the innovation
sector through increases in raw materials taxes and increased collection rates.
cost of the pandemic to be paid, with the exception of a few important
​Ministry considers the economic
industries.
6 ​RUSSIA Country Report​ October 2020 ​ ​www.intellinews.com