Credit Manager Magazine 2/2021

50 CREDIT MANAGER MAGAZINE Luty / february 2021 BUSINESS Russian economy after a year with Covid-19 The economic recession caused by the pandemic crisis and related quarantine measures in Russia continues. Today however, the forecast of GDP dynamics by the end of 2020 is much more optimistic than just a few months ago. Ksenia Timofeeva Business Development Director Malakut Trade Credit (part of ICBA) The covid-19 situation The peak of economic activity growth oc- curred in August-September. After that due to the second wave of the pandemic, Russian market began to stagnate. The further dy- namics of the recovery of the Russian market will strongly depend on the evolution of the epidemiological situation. In fact, there was no full lockdown in autumn in Russia as it was at the first wave. Government introduced just a number of enhanced measures. Al- ready in mid-January, the authorities of Mos- cow and some other regions of Russia lifted some measures aimed at slowing the spread of the coronavirus. For example, restaurants operate on a regular schedule, museums, li- braries, schools are open, and companies are no longer required to keep 30% of employees working remotely in Moscow. Of course, a number of restrictions remain in force, but cases continued to recede over the last days of January. Since December, vaccination with the Rus- sian Sputnik V vaccine has begun. Since mid-January, Russians can do it free. In this regard, government expects a decline in cases by March. GDP: 2020 results and forecast for 2021 The International Monetary Fund (IMF) has raised its forecast for Russia’s economic growth in 2021-2022. According to the up- dated global forecast of the IMF in January 2021 the Fund expects that Russia’s GDP will increase by 3% this year and by 3.9% in 2022. IMF assumes that Russia’s economy can reach its pre-coronavirus size at the end of 2021 and reduced forecast of GDP in 2020 from -4% to -3.6%. More details can be found in the ratings of other experts in the chart 1. For example, the official forecast of the Ministry of Economic Development for 2021 is +3.3%, and for 2022 is +3.4%. Foreign trade Foreign trade slowed down in Russia as ex- pected. According to the Federal Customs Service, 9 months of 2020 shows that ex- ports decreased by 21.9%, and imports by 6.3% compared to the same period in 2019. The decrease of import volumes caused by the volatility of the ruble exchange rate, high level of market uncertainty and quarantine restrictions. Decrease of oil sales, petro- leum products and gas entailed export drop. According to results of 9 months of 2020, oil exports fell by 41% in USD, petroleum products – by 32%, natural gas-by 48%. The volume of commodity imports decreased insignificantly (-7% for 9 months of 2020), compared with a sharp drawdown of imports of services (-54%). We expect that due to a gradual recovery of business activity in the global market and the softening of OPEC+ deal terms, export vol- umes will grow in both volumes and dollars. If you look at the breakdown by country, the most significant foreign trade partner of Russia is China according to the results of 9 months 2020. Imports from China increased by 0.9% compared to 2019, while exports to China are gradually recovering (-14.5%). For comparison export to EU dropped by 28.6%. As for trade volumes with Poland, according to the results of 3 quarters its share is 2.5% of all foreign trade of Russia with other coun- tries. Exports fell by 25.7%, while imports fell by 5.5%. This decline is one of the lowest in comparison with other EU countries, for which the decline was even greater. Industries Current economic crisis had various impact on different sectors of the Russian economy. Assessing the net financial result of Russian organizations (profit minus loss) for Janu- ary-October 2020 1 , it fell by 38.2% year to Source: Rbc