the crisis is there, obviously. No need to wait for the classic two quarters of GDP decline, to be sure. The crisis is not a classic, its the main reason pandemic coronavirus, why definitely not easier. If you count since the beginning of the introduction of the Russian anti-virus quarantine — March 25 (after which the quarantine was tightened) that finally pushed GDP down, it is possible to sum up the first month of the crisis. They are extremely dramatic.
Panic in the oil market
the Most sensational manifestation of the crisis — it took a digger in the price of oil. On April 20 trading on the new York Mercantile exchange the price of may futures for the North American WTI crude oil initially fell to $0 per barrel, but then prices went negative for the first time in history! The price of oil at the time came to -$40 per barrel, the sellers of the contracts pay buyers.
the Key phrase in the previous paragraph — “may futures”. April 21, what MK wrote, was the day of expiry of the futures contracts: if the contract remained in the hands of the buyer, he had to pick up my oil, which from 1 to 5 may have been received at the main oil storage USA in Cushing, Oklahoma. Futures always buy not only those who are really in need of oil. Speculators are long oil futures is perceived as a kind of financial instruments. But this time their number was due to the fall in the price of oil going through the roof, and a large part of the speculators were unable to sell may futures and buy longer contracts. In the result of panic selling prices went into a huge disadvantage.
This is the technical side. And what economic conclusions? The main cause of the incident is the falling demand for oil due to anticreasing idle world economy and a significant reduction of reserve oil storage capacity. It will not go away and, therefore, may be repeated price shock, though not in such an acute form. The reduction of oil production under the renewed agreement, OPEC+ will start to operate in may, but the scale of reduction may be insufficient. Only when the economy has been ill with the coronavirus, the demand will recover, and with it strengthened and prices. Events April 20 may push OPEC to take more drastic production cuts. The most important lesson — the fragility of economic models and economic policy instruments, built around crude oil prices.
How much is the APR?
Quarantine is a conscious choice between the risk of uncontrolled spread of coronavirus and fall of the economy in favor of human health. What is the price?
the Russian price tried to define the dimensions of “Alfa-Bank”. They took into account, first, the structure of the Russian economy��key. This was highlighted particularly affected sectors: transport, construction, public catering, non-food retail, etc. Their losses were estimated at 60% (in monthly terms). Secondly, take into account the reduction in electricity consumption. In the first week of quarantine it was 5%, later 3%. Thirdly, considered the reduction of freight by rail. Here the picture is similar — falling in the first two weeks amounted to 7-8%. Summative evaluation: the scale of monthly GDP decline by 10-15%. This is less than the previous forecast of the same Bank — 20%, but still such a drop will feel it.
Here deployed assessments the April results yet. It is clear that less any other affected state employees, pensioners and employees of large companies. The hardest crisis hit small and medium businesses. Direct monetary support of the population, as is already the case in the United States, several European countries, Canada, Saudi Arabia and other countries, the Russian anti-crisis program does not provide. At least for now.
There is a forecast of the Russian ratings Agency ACRE. In the baseline scenario in 2020 is expected to increase unemployment to 6.7%, which is one and a half times higher than at the end of 2019. Falling real incomes will amount this year to 6.4 percent. In the pessimistic scenario, revenues will fall by 9.9%, while unemployment will rise to 8%, i.e. almost doubled compared with the 2019 year (to 4.4%).
the Chief of the Russian “national project” 2020 was the crisis.