Ministry of Economic Development: the second wave of coronavirus remains the main risk for macro forecast for 2020-2021

Ministry of Economic Development: the second wave of coronavirus remains the main risk for macro forecast for 2020-2021

Ministry of Economic Development: the second wave of coronavirus remains the main risk for macro forecast for 2020-2021

The Ministry of Economic Development did not include in either the baseline or the conservative scenario of the macro forecast for 2020-2023 the “second wave” of the coronavirus, but stresses that this wave remains the main risk for the forecast parameters.

“The projected growth trajectory up to the end of 2020 and in 2021 is still characterized by significant uncertainty. The baseline and conservative options do not anticipate a 'second wave' of new coronavirus infection, but it remains a key source of risk for the projection parameters,” Macro forecast for 2020-2023 published by the Ministry of Economic Development on Saturday, which was approved by the government at a meeting on September 16.

The ministry states that sanitary and epidemiological restrictions are being lifted gradually and unevenly across regions, depending on the epidemiological situation and the capacity of the healthcare system.

“Part of the sanitary and epidemiological requirements for the operating conditions of enterprises and organizations will be long-term. It is the sanitary and epidemiological situation that, first of all, will determine the speed of economic recovery,” the macro forecast says.

In addition, the ministry points to high uncertainty in the development of the world economy and a wide range of forecasts by analysts and international organizations on global growth for the current and next year: from -3% to -5% for 2020 and from 3.5% to 6. 5% for 2021. “The recovery of the world economy is significantly hampered by the uneven exit of countries from quarantine, which can lead not only to the persistence of restrictions on the demand side, but also to the emergence of gaps in global value chains,” the Ministry of Economic Development warns.

At the same time, the ministry notes that in the third quarter of 2020, “restrictive measures have become more flexible and targeted than at the initial stage of the spread of the new coronavirus infection.” “This approach allows us to expect a further gradual recovery in global economic activity in the second half of 2020 and in 2021,” the macro forecast says.

As reported, the baseline forecast includes the price of Urals oil at $ 45.3 per barrel in 2021. In 2022-2023. oil prices will be in the range of $ 46-48 per barrel. “The specified trajectory generally corresponds to the current values of forward contracts for the respective periods,” the ministry said.

A decrease in the RF GDP in 2020 is expected at the level of 3.9%, a fall in retail sales at the level of 4.2%, a fall in investment in fixed assets at the level of 6.6%.

“Further recovery of economic activity from current levels will be constrained by a number of factors. First, short-term factors make a significant contribution to the recovery in the consumer market – the deferred demand of the population formed during the period of the quarantine measures; social support measures taken with a limited duration; additional demand on goods and services within the country during the summer holidays due to the persisting restrictions on international movement. As these factors are exhausted, the fall in household income will restrain consumer demand. In these conditions, household consumption in the coming months will remain below the levels of the previous year, “- warn the Ministry of Economic Development of the slowdown in the recovery of economic activity.

“Secondly, in the second half of this year, a further decline in investment activity is expected. Its decline will be due to the inertial nature of the capital investment planning processes in companies that continue to revise their investment programs,” the forecast also says.

“Thirdly, in the context of the OPEC + deal aimed at supporting prices, the indicators of physical volumes of output in the mining complex will remain weak until the end of the year. In addition, the continued restrictions on international movements will restrain the recovery in the transport industry,” Ministry of Economic Development.

In 2021, according to the Ministry of Economic Development, a number of multidirectional factors will influence the rate of economic recovery.

“On the one hand, the negative impact of the residual quarantine restrictions, as well as changes in consumer behavior will be less significant than previously assumed. In addition, the implementation of the effect of the monetary policy easing will provide support for growth. On the other hand, further normalization will be a constraining factor. budget expenditures after increasing them in 2020 in order to combat the spread of the new coronavirus infection and support the economy, “the ministry describes the factors that will affect economic growth next year.

‚ÄúTaking into account these factors, GDP growth in 2021 is expected at 3.3%. Thus, by the third quarter of 2021, the Russian economy will reach the pre-crisis level and by the end of 2021 will enter the trajectory of sustainable growth, corresponding to the achievement of national development goals. 2022-2023 economic growth will continue at a rate of at least 3%. At the same time, in 2022, a positive contribution to GDP dynamics will be made by the completion of the OPEC + deal in accordance with its current parameters, which will lead to an increase in oil production, “the ministry says. forecast scenario for 2021-2023.

The conservative version of the forecast of the Ministry of Economic Development does not qualitatively differ from the baseline scenario. In the conservative version of the forecast, the recovery of the world economy will proceed slower than it is assumed in the baseline version; as a result, oil prices in the framework of the conservative version are forecast in the range of $ 43-45 per barrel in the medium term. Russia's GDP growth in the conservative scenario is projected at 2.7% in 2021 and 2.9% in 2022, followed by stabilization at about 2.5%.

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