WILL GOVERNMENTAL ANTI-CRISIS PLAN HELP RUSSIAN ECONOMY?
On March 16, Mikhail Mishustin, the Prime Minister, suggested a package of responses to the crisis caused by coronavirus pandemic in Russia at a strategy meeting involving Deputy Prime Ministers. This pandemic resulted in Ruble depreciation as well as losses for touristic industry and airlines. The Russian BBC service interviewed economists regarding the effectiveness of these measures. Among them was Aleksey Vedev, Head of Financial Studies Department of the Gaidar Institute, who shared his opinion.
“The budget data for January-February showed that we switched to promotion policy including budget expenditures, which is positive for the economy,” the expert noted.
Aleksey Vedev reminded: “Airlines and tourist agencies have not flourished even in the past”. Their problems can cause crisis phenomena for entire economy, however, they will be smoothed by state subsidies”.
Regarding the crisis scenario, experts say that household incomes will definitely fall. “My basic forecast for this year is minus 1.5–2% of the GDP,” says Aleksey Vedev. “Accordingly, private consumption will fall to 3-4%.” Real disposable incomes of the population will decrease at the same value, the expert summed up.
Aleksey Vedev reminded: “Airlines and tourist agencies have not flourished even in the past”. Their problems can cause crisis phenomena for entire economy, however, they will be smoothed by state subsidies”.
Regarding the crisis scenario, experts say that household incomes will definitely fall. “My basic forecast for this year is minus 1.5–2% of the GDP,” says Aleksey Vedev. “Accordingly, private consumption will fall to 3-4%.” Real disposable incomes of the population will decrease at the same value, the expert summed up.