Russia predicted a major crisis in a decade

Russia predicted a major economic crisis in more than a decade because of the coronavirus pandemic and the fall in world energy demand, writes Bloomberg referring to research of analysts of the energy centre SKOLKOVO.

Almost half of Russia’s budget accounts for revenues from energy trade, the Agency said. However, due to pandemics and global warming, demand for fossil energy sources fell sharply, which even led to a short-term setting negative prices for raw materials. Analysts admit that coronavirus will accelerate the world’s rejection of fossil fuel and that peak consumption of this energy could come in 2019. This is 15 years earlier than predicted by the Russian government in March 2020.

If the Russian economy does not adapt to the new reality, the budget revenues will “fall dramatically”, and the country’s GDP growth in the next 20 years will be limited to 0.8 percent. This level is significantly below the estimates of the Ministry of economic development, which assumes growth of 2.8-3.1% in 2021-2023 years, after falling 5 percent by the end of 2020.

Earlier, the head of the accounts chamber Aleksei Kudrin said the current crisis is an occasion to review the economic policy of Russia. In his opinion, the country can no longer rely on income from oil, which is obtained in the last decade, and needs to start making the technology.

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