The losses for Russia’s economic sectors which are worst-hit by the coronavirus pandemic could reach 17.9 trillion rubles ($239 billion), while up to 15.5 million people could lose their jobs, a new macroeconomic study by the National Rating Agency (NRA) says, according to Izvestia.
The crisis will deal a heavy blow to the service sector, while the food industry, agriculture, fishery, and forestry sectors will be the least affected, the study says. According to the experts, the government will try to prevent some of the damage by taking additional measures for helping the worst-hit parts of the economy.
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 85-90 rubles to the U.S. currency. Experts believe that this optimistic scenario, where economic growth would continue, and a pessimistic scenario, characterized by a deep fall, are highly unlikely.
The Russian National Wealth Fund’s reserves will be drained in the coming two years rather than in six years as the government said earlier, specialists from the Economic Expert Group, which consult with the Finance Ministry and the Ministry of Economic Development, predicted, according to Izvestia.
Given the scale of the current crisis, the experts warn that the government will have to ditch the budget rule and take out loans, while the Central Bank would have to start printing money to buy the Russian government’s securities.
“The hallmark of the current situation is virtually a full lack of revenues, including in the sectors, which are the most vulnerable to shock. This creates a serious threat of an exodus of small firms from the market, which have no reserves, severing production ties, and a sharp rise in unemployment and mounting poverty,” the article’s authors wrote.