CBR predicted a significant decline in economic activity in the coming months

CBR has predicted a significant decline in economic activity in the coming months the CBR has predicted a significant decline in economic activity in coming months
Akishin Vyacheslav / Moscow-Live.ru

the Bank of Russia in the coming months, expect a temporary but significant decline in economic activity due to the spread of the pandemic coronavirus and related restrictive measures, both globally and in Russia, said in comments of the Central Bank in the economy.

“the timing of the return of normal economic regime will be primarily determined by the speed of improvement of the situation with coronavirus and mitigate the necessary restrictive measures. The Bank of Russia will consider the impact of this period of low economic activity in the medium-term Outlook for inflation, inflation expectations and economic development,” notes the regulator.

the Central Bank in a press release on the results of the Board of Directors on 20 March noted that moderate growth of the Russian economy in the beginning of the year may be replaced by a slowdown in the coming quarters. The Bank of Russia was removed from the message the reference to its forecast for GDP growth for 2020 (1,5-2%), reports “Interfax”.

the Regulator said that in February and March events are developing with a substantial deviation from the baseline scenario of the forecast, due to worsening prospects for global growth against the background of the spread of coronavirus and the introduction of restrictive measures on cross-border transport and movement, as well as a sharp deterioration in the dynamics of world commodity and financial markets.

In the commentary on the economy the Central Bank said that in February 2020, both industrial and consumer activity in RhoSMAI showed growth. A leading indicator of ROS production in most industries, partly due to the calendar factor leap year.

Increased production in mining, manufacturing, investment and intermediate goods, expanded investment activity, the unemployment rate has hit a historic low, and an increase in real wages supported consumer demand.

“However, the spread of coronavirus and the restrictive measures taken by governments, both globally and in Russia, will lead to a temporary but significant decline in economic activity in the coming months”, – said the Central Bank.

it also noted that in February, production of consumer goods “was corrected down to the level of December 2019”. Production of most food products declined after rapid growth in previous those about months. The growth is preserved in the production of milk and dairy products, aided by favorable pricing environment in the domestic market and also an increase in the supply of raw milk.

“On the background of favorable situation in agriculture has increased the production of finished animal feeds. However, large-scale suspension of economic activity in China in connection with the spread of the coronavirus can lead to a shortage of raw materials that are used in the production of animal feed. Under these conditions, the feed production in Russia could significantly slow down or decline in the coming months” – analysts predict.

the Issue of non-food goods also continued to decline. Decreased production of shoes, leather goods, production of printed products. However, amid growing consumer demand has continued to expand the household appliances production. “Significantly increased the production of drugs, which, in all probability, connected with the spread of news of coronavirus infection”, – noted in the Central Bank.