Analysts are confident that economic recovery will not be quick
The Russian economy has moved to a stage of smooth recovery after the quarantine, but it continues to maintain a weak balance between insignificant growth and another collapse, Forbes reports with reference to Vedomosti.
The situation is stabilizing, but there is not enough information to come to an unambiguous conclusion, according to Vladimir Tikhomirov, a leading analyst at the investment bank BCS Global Markets. He is confident that investments have suffered the least during the period of the restrictions. By the way, the construction sector was decreasing by 2% every month. According to Natalya Orlova, an analyst at Alfa Bank, the nastiest fall was noted in April. Already in May, the collapse was not so severe. The rise in the unemployment rate and the economic contraction in April were less than expected.
Tikhomirov also noted that after the end of stimulus in July, the already small support will stop pushing the economy towards recovery. In July, the Ministry of Finance announced a change in 600 billion rubles allocation. In 2021, the Ministry of Finance plans to keep spending at this year’s level: in March it was planned to distribute 20.8 trillion rubles, which is 1.1 trillion more than decided, but less than expected to spend in 2021.
According to Tikhomirov, the insignificant monetary policy pursued by the regulator and the government will not ensure a stable recovery of the financial system. Falling interest rates can help people with a high credit burden, but will not help stimulate demand. He is confident that only a general recovery of the financial system can help the economy.
As the Central Bank reports, businesses and most of the consumers began to recover by mid-June. The regulator also announced the recovery of financial flows, but they still remain at a relatively low level. Also, the Central Bank noted the raise of deposits by 1.4%. A significant part of the Central Bank’s respondents want to return to the previous level or increase production. However, according to the results of a study provided by the analytical organization Nielsen, it is known that the majority of Russians frequently buy products of a low price segment. Increasing consumer inequality has become a new and growing trend.
According to an employee of an international economic company, a non-food sector will face the hike due to the accumulated pent-up demand, but most citizens will continue to save due to fears of another virus wave and another decrease in income. Analysts from the Development Center of the Higher School of Economics expect a drop in incomes of the population even with a 8.2% state support provided the entire year. Experts from the Ministry of Economic Development and Trade expect a decline of 3.5%, and in 2021-2022 growth by 2%–3%.
Gazprombank experts are confident that the period of easing monetary policy has already ended. The lower limit of the refinancing rate is confined by possible inflation. However, in case of a long recovery in consumer demand, the rate may decrease by 4%.