From poverty to misery. What the Russian economy will be after covid

From poverty to misery. What the Russian economy will be after covid

2 December 2020, 16:29
The real standard of living of the majority of the country's citizens will not return to the level of 2019.

Economist Dmitry Milin made a forecast for the state of the post-covid economy of Russia:

“The second wave of covid will most likely end by spring. Then there will be a third, but small, like after the "Spanish flu". Sometime by the end of 2021 and after that, covid will become an ordinary seasonal virus, which everyone will soon forget about in the midst of some seasonal flu wave.

I wondered what the post-like economy of Russia will look like?

  1. By the end of 2020, the Russian economy will fall (depending on the impudence of Rosstat's lies) from -4.0% to -5.0% compared to the level of 2019. More than -5.0% are afraid to "draw", but in vain. Then one could "draw" a more confident recovery, which could be attributed to п̶р̶i̶h̶o̶d̶u̶ ̶v̶e̶s̶n̶y̶ "government actions to implement the national economic rescue plan." However, 2021 will have to be content with a recovery rate of 2-3%, with a drop in their rate to 1-2% in 2022. That, in general, will allow reaching the GDP level of 2019 no earlier than 2023.
  2. Small businesses will shrink dramatically and will not recover to 2019 levels for likely another decade, if ever. With the current taxation and the level of non-tax levies in the form of "platons" and systems of compulsory paid labeling of goods, the level of profitability of a business will not make it interesting for entrepreneurs. The restaurant business will slightly exceed the current covid level, but the population will only have to dream about the diversity of 2019.
  3. For the majority, the real standard of living will never return to the level of 2019 either. The country's slow slide from poverty to misery will continue.
  4. The "bubble" inflated in the real estate market by cheap mortgages, which led to soaring apartment prices, will play a cruel joke with borrowers who overestimated their financial capabilities for the long term and with developers who will launch more projects than the market will be able to digest at the end of the program mortgages at 6.5%. When the inability of a significant part of borrowers to service mortgage debts, and developers to sell off launched projects, it will become obvious that a new (although the old, sluggish one was leaving?) Banking crisis will come when the Central Bank will have to urgently save banks associated with mortgages and construction lending.
  5. The Russian economy will become even more state-owned when state-owned monsters like Sberbank buy up everything that is more or less interesting on the market with free money from the Central Bank of the Russian Federation - the private economy will collapse. Business innovators will be replaced by relatives-friends-lovers-children of Putin's friends. There will be no sense in creating a new business with the prospect of selling it to Sber. The Russian economy will acquire the familiar features of the Soviet - stagnant".


Blog readers offered even more pessimistic predictions:

- I don’t think there will be a soviet economy. Rather, something like the Latin American dictatorships of the last century, when all resources were concentrated in the hands of security officials and relatives.

- The degradation of the economy is programmed in the very structure of the DNA of this regime... There would be a covid, there would be no covid, the result is the same - at best, growth at the level of statistical error... And in the future this may not be .. We are waiting for a decade, at least, stability... Stability at rest... This is at best... Or maybe a black swan in the form of a fall in oil prices... Then everything will accelerate.

- Small business will never recover under this government. There are very few fools to start their own business, then to give it to the security forces.

- Renovation, apartment buildings, labor camps, elimination of welfare, isolation...

- Well! And then all this shit will collapse! It remains only to wait...

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