Russia’s GDP in Q2 will drop by a drastic 18%, along with a similar drop in people’s real income (17.5%), according to a forecast by the Vnesheconombank Institute cited by RBC.
However, there are some reassuring factors. This forecast is based on a negative oil scenario that has already been mitigated thanks to the OPEC+ oil production cut deal. Therefore, we may expect a certain recovery of the oil prices.
At the same time, in the next few months, further fall will be largely due to the lockdown rather than low oil prices. As a result, the economy will fall by 3.8% at the year-end and will see a fast recovery next year.
Earlier, Central Bank Governor Elvira Nabiullina also said that the GDP growth this year will be negative; however, this situation should not be considered a recession. As a rule, recession implies negative growth rates for at least two subsequent quarters. The banking regulator governor expects that as soon as in Q3 (July to September) of this year, first economic growth will happen.