A serious recession of the Russian economy at the end of the year is forecasted by the Bank of Russia. Its report on the state of national economy suggests that over the last months of 2020 the trend of a further economic decline may turn out to be stronger than that of a recovery.
As the Central Bank’s experts noted, in October most economic actors were expecting the second wave of pandemic and a possible subsequent second lockdown, therefore a wholesale trade decline was registered. The experts were also quite pessimistic about the domestic demand. Non-food goods sales in October were at the level of the previous month, while food sales saw a minor growth which evidences a potential slow economic recovery.
Yet the economic depression is stronger and even the pharmaceuticals production has declined. This phenomenon may be explained though by an exceptionally high demand for medicines in the previous months. Experts believe that with many people working and studying from home, a demand in December will drop even further.
Current data suggests that the 2020 national GDP contraction is likely to be at about 4%. No reliable forecast for the state of the national economy at the start of 2021 can now be offered, yet some economic growth may resume in the first quarter of the next year.
As Invest Foresight reported, in 2021 demand for oil may start growing and thus support Russia’s economic recovery, but the demand for oil in 2020 may ultimately be much lower that it had been anticipated.