Alfa Bank analysts have estimated direct economic support in Russia at 0.3% of GDP, or RUR 340 bln ($4.5 bln), although some estimates are closer to 3% of GDP, while Minister of Economic Development Maxim Reshetnikov said the government’s anti-crisis program is worth 1.8% of GDP, RBC reports.
Economists Natalia Orlova and Anna Kiyutsevskaya from Alfa Bank’s Macroeconomic Analysis Center concluded that the authorities are trying to support the coronavirus-impacted economy as sparingly as possible.
Direct fiscal support at 0.3% of GDP is definitely too sparse, and it is certainly not enough to maintain jobs – which is a priority – says Artyom Deyev, head of analytics at AMarkets.
These figures are particularly unimpressive compared to other countries that are providing from 5% to 20% of GDP for economic relief. The United States plans to spend almost 10% of GDP, and Germany, 18%, although most of this will be state guarantees.
Many countries are helping small businesses pay wages to their workers who are required to stay home during the pandemic. Australia has allocated $4 bln for this purpose, Germany as much, and the Swedish government intends to subsidize 15% of salaries to support workers on reduced schedules.
Developing countries (including Russia) support businesses affected by the outbreak mainly through deferred tax payments and lower tax rates. Preference is given to the industries that have suffered the most (aviation, tourism, and retail).
“The underfinancing of measures to support the economy and jobs clearly worsens the situation in the country,” Artyom Deyev said. “As a result of these half measures, Russia may be crawling out of this crisis for years.”