The crisis in Europe can be extremely severe, it will be accompanied by falling economy and consumption, rising inflation and unemployment, and the way out of this recession can take years, a private investor, founder of the “School of Practical Investment” Fedor Sidorov, says.
High energy prices and problems with the production of agricultural products due to drought amplify negative trends, the expert emphasizes.
But Europe is not the only territory where a crisis is expected. The global crisis will affect not only Europe, but also the United States, and China.
Central Bank released recently its report about the consequences that Russia will face in the event of the implementation of this scenario. The regulator expects the onset of the world recession as early as 2022.
“For our country, the crisis in developed countries will mean a reduction in oil prices due to falling demand (Urals in 2023-2024 can cost $35 per barrel in average). This can lead to strengthening export decline in 2023 by 26-30% (with continued decline in 2024 by 14.5-16.5% and stabilization in 2025), similar further collapse of imports and current account collapse ($39 billion surplus in 2023, $3-4 billion in subsequent years). With such state of affairs a strong devaluation of the ruble is quite expected, which will lead again to a serious decrease in citizens’ incomes and a drop in consumer demand“, Fedor Sidorov predicts.
In short, the global recession will be a factor in a long fall of the Russian economy with a long (for several years) recovery to the level of 2019, the investor summarizes.