If for most other countries the drop in oil prices (and hence fuel) is a stimulus, for Russia, the situation is fundamentally different: while falling oil prices is a compression of domestic demand, and this will lead to the fact that a substantial part of the dismissed personnel for quarantine of enterprises simply will not be able to open again (and the longer the quarantine, the effect will be tougher).
Putin made the decline in world oil production 10 million barrels per day
this is stated in the analytical note “On the outline of a constructive variant of the forecast”, which was prepared by economists CMASF Dmitry Belousov, Oleg Solntsev, Elena Penukhina and Kirill Mikhailenko. The calculations they proceeded from a two-month duration of the quarantine restrictions in the cities with a total population of 33.4 million people, with the loss of 15-17% productivity in them during this period.
Economists point out that Russia will not be able to avoid more or less stringent two-year recession – with corresponding social consequences, including increases in poverty and unemployment.
However, if the government, with the participation of the Bank of Russia will carry out the planned programme of business support, the magnitude of the crisis and especially its social consequences can be much lower.
With the active anti-crisis policy the decline in GDP would be able to keep within 2.5% in 2020 and 0.8% in 2021, unemployment would not exceed 5.8 percent at its peak in 2021 (after a 4.6% by the end of 2019). The win, according to CMASF, relative to the scenario “severe crisis” will be on GDP of 0.5-0.8% in 2020 and 0.1-0.3% in 2021 and 2022, unemployment and real disposable income of the population is also quite large. Thus, in the “hard crisis” the unemployment rate rises in half by 2019.
the CMASF Calculations are based on the assumption of a significant fall of demand for Russian exports of oil, gas, machinery and equipment, services of tourism and transport, as well as that of pre-crisis levels, oil prices will not rise never and only in 2021 will be included in the range of 42 to 45 dollars for barrel Urals – that is, rise to the level at which oil revenue is neutral for the Federal budget.
the Finance Ministry will sell foreign currency in April to 3.5 billion rubles per day.
the Baseline scenario is based on the fact, the government will carry out the already planned anti-crisis measures at the expense of reserve Fund of 300 billion roubles in 2020 and 200 billion in 2021 and the redistribution of part of previously approved expenditures of the Federal budget (400-500 billion) to support industries and maintain employment. The evaluation says, the government will have in 2020 to spend 1 trillion rubles from the national welfare Fund (available for expenditure according to the budget rule 3 trillion rubles). The most expensive event, as accepted by the government – halving rates of insurance contributions for SMEs for the first three quarters of 2020, the volume of revenues extra-budgetary funds is estimated at 300 billion rubles. For regional budgets, says economists feel justified to take time off from their balance for business support and to prevent the total deficit to 0.5% of GDP in 2020 and 0.2% of GDP in 2021. The Bank of Russia, economists say CMAC should refrain from raising the key rate, as well as to support debt market, especially to maintain low borrowing costs for the budget.