Recovery of the Russian economy to the level before the pandemic may take more than five years. This was stated by the head of ACRA (Analytical Credit Rating Agency) Mikhail Sukhov, RBC reports.
The fact that the country’s economy will gradually return to the pre-pandemic level for more than one year was clear before, Artem Deev, head of the analytical department at AMarkets, said. The fall in 2020 was serious, compared to it, the growth in 2021 was a consequence of the “low base”. Given the contraction in the economy after lockdowns, even the strongest increase in indicators in statistics was expressed in large numbers, the expert explained to Invest-Foresight.
“And the year 2022 brought shocks to which the country will adapt for a long time. The first is sanctions, because of them a complex process of reorienting exports will begin. After all, it is far from easy to replace the falling European volumes of oil, gas, and oil products (as well as coal) to Asia”, the analyst emphasizes.
There is deficit in necessary infrastructure, as well as in own fleet and the throughput capacity of the railway to supply the new regions with the volumes of raw materials that previously arrived in the EU through developed transport infrastructure. And this requires gigantic funds, and in conditions when the country’s spending is only growing, and revenues are decreasing. And the negative effects of the imposed sanctions from the West will only grow – next year at least, and possibly longer, Artem Deev warns.
The second shock after the sanctions is a drop in domestic consumer demand.
“The most seemingly simple option to replace some of the falling export flows is to direct them to domestic production. But we also do not have enough consumption for both business and citizens, the analyst notes. “The demand among the population for the same gasoline, industrial goods and even food is falling – and this reduces the income of the entire country’s economy.”
The third important factor after the sanctions and the fall in consumption is the global recession, which will reduce the demand for export-important goods for Russia, the specialist continues. That is, with a general decrease in consumption at the crisis period, competition between producers will increase, it will be more difficult for our country to work in the markets. As a result, we can expect that the boldest forecasts for sales of Russian raw materials abroad may not be justified.
“But within two years, the Russian economy will switch in one way or another, because we should expect a recovery to the level of 2019 after two years. At least, both the Government of the Russian Federation and the Central Bank of Russia rely on such a forecast”, Artem Deev summarizes.