Economists believe that the country will face a recession over several quarters, with the service, transport, tourism, construction, and financial sectors being hit the hardest. However, analysts interviewed by the newspaper emphasized that the world economy will slow down even more, and in 2021 economic growth will return to Russia.
Extending the non-working holiday until the end of April significantly increases the risks of an economic recession and a decline in the population’s well-being, Anton Pokatovich, chief analyst at BCS Premier, told Izvestia.
In addition, the lockdown combined with a decline in income will sharply reduce aggregate demand. Thus, the ‘cost’ of the non-working holiday to the economy may amount to about 3.5-6 trillion rubles ($45 billion-$78 billion), or 3-5% of GDP, according to the results of the month. The year-on-year decline will reach 2.5-2.6%, the expert believes.
At the same time, the global economy’s losses under an adverse scenario of the spread of infection will be even greater than Russia’s, therefore a slowdown by the end of the year is inevitable, the director of the HSE’s Center for Business Tendencies Studies Georgy Ostapkovich told the newspaper. Russia is more autonomous and isn’t very dependent on global value chains, so today that is a plus, the expert noted.
The transportation sector, which accounts for 10% of the population’s total spending, will be hit the hardest by falling demand, Gazprombank said. Spending on leisure, clothes, and shoes will also be reduced. The summer season is a big question, so the tourism and leisure sector will be hit hard, predicts Anton Tabakh, director of macroeconomic analysis and forecasting at Expert RA. In addition, even the wedding industry, the beauty and fitness spheres, and restaurants that fail to adapt to the new reality will suffer greatly.