The Russian economy is unlikely to contract as dramatically as the global one in 2020, Deputy CEO of Veles Capital investment company Ivan Manayenko told an online anti-crisis conference Choice of Opportunities – Options for Action.
“In our opinion, the real picture in 2020 may be better than the IMF forecast, and the decrease (of GDP – ed.) for the year will be 2–2.5%,” Ivan Manayenko said.
However, the Russian economy may slide into stagnation as soon as in 2021, primarily due to the oil and gas market situation, as well as erosion of small and medium-sized businesses from the economy.
“Despite some diversification and lowering of its oil and gas dependence, Russian GDP still largely depends on oil prices. After 2008, that dependence also extended to their ruble equivalent, in addition to absolute values. In this context, it is obvious that the state is shifting its problems to businesses and to the population through the devaluation of the ruble,” Ivan Manayenko says.
The expert also believes that the ruble will most likely have to be devalued to achieve higher economic growth rates in 2020.
“In 2020, we expect the oil price to rebound to a level of $40 along with a slight appreciation of the national currency, to 68 rubles per dollar. In this scenario, the drop will be about 2–2.5%,” he explained.
The International Monetary Fund projection for global GDP next year is down 6% or more. This is 60% greater than in 2009, the previous post-global crisis year, the expert pointed out.
For Russia, the IMF forecast puts GDP decline at 5.5%. If we trust the IMF, the only markets that will grow are China and India, while the global economy will not see a quick recovery. Moreover, even developed economies will shrink over the next two years.