Russian Prime Minister Mikhail Mishustin instructed First Deputy Prime Minister Andrei Belousov and Deputy Prime Minister Tatyana Golikova (who is in charge of the social issues) to propose prompt measures to support steady development of the Russian economy and social stability.
Other government officials were instructed to get involved with the Coordinating Council on Measures to Counter the Coronavirus, Rossiiskaya Gazeta reports.
The Russian economy is already experiencing negative effects of the coronavirus spread in other countries. As of the end of January 2020, the demand in the mining industry went down 2.3%. Oil production decreased by 0.8% and oil export by 3.6%. Gas production is down 3.1% and gas export 24.2%. Coal production lost 7.1% and coal export 15.5%.
As a result, the oil sector may lose $15 to $18 bln over H1, including due to the oil price drop. The railway industry may lose $10 to $30 mio while airlines will lose $200 to $550 mio, according to AMarkets Analytics Director Artem Deev.
“The capital outflow will grow by $5 to $10 bln due to the increase in foreign corporate debt payments. An even steeper fall of the global markets than in the early March will affect even more industries. The demand for investment products will go down; the sectors dependent on imports will become less cost-effective,” the expert continues. “If the crisis scenario proves true (spread of the infection in the country over a long term and mass quarantine), Russia’s GDP will go down 2.1% while household expenses (which reflects the domestic demand) go down 1% and the gross accumulation of the main capital will decrease by 1.5%. Exports will go down 1.9% and imports 2.9%. The economic decline trend will continue for the next two years. In 2021, Russia’s GDP will go down 1.1% and in 2022 0.7%.”
Egor Klopenko, venture investor, founder of the ITLEADERS venture investors’ club and founder of the KLOPENKO GROUP consulting company, believes that the direct damage of the coronavirus is unlikely to be major while indirect losses can be very significant due to the global economic slowdown.
“We have already seen how much our stock market has lost. We see losses in the oil market. Initially, these losses were caused by the coronavirus. Our national currency is falling and it is still only the beginning. Even the GDP forecast for 2020 has been adjusted to the zero growth. It is a very serious decline which is crisis as it is,” the expert notes. “On the other hand, if the situation stops getting worse, Russia has all the tools and resources necessary to handle all these challenges.”