Worst-case scenario: the pandemic inflicted 5 brutal blows on the Russian economy

Analyst Andrey Nalgin was embarrassed by Putin’s words at a meeting with Sechin that the Russian economy should sooner or later begin to grow. But all over the world they talk about the recovery growth of the economy after a record fall into a pandemic from next year, and not someday... - the author wonders. What's wrong with the Russian economy? Is it true that the coronavirus crisis is so strong on her. And Nalgin has five such blows at once:

1. On the industry

In April, the decline was 7%, in May - almost 10%, in June - 9.4%. Moreover, a double blow. The decline in global demand for hydrocarbons hit the regions of the export, mainly oil-extracting industry: in the Khanty-Mansiysk and Nenets Autonomous Okrugs, volumes decreased by 17-18%, and in the Tomsk region - by 15%. In addition, there was a strong contraction of the domestic market. In the regions of the jewelry industry (Kostroma region - 26%), the automotive industry (Nizhny Novgorod, Ulyanovsk regions - 21%, Kaliningrad and Samara regions - 12-13%), oil refining and tire production (Omsk region - 18%).

2. On the market services

Quarantine dropped retail sales by 23% in April and 19% in May, although the decline slowed to 8% in June. In Moscow, the quarantine policy of the authorities reduced retail trade in April and May by 31% and 26%, and in the Belgorod region - only by 4-5%.

3. On the regional labor markets

Here the blow fell on the market services sector in large cities. If we count on registered unemployment, then with the increase in benefits to the subsistence level, from the end of February to the end of June in the employment services, the growth of registered people was from 700 thousand to 2.8 million, or four times!

4. On the regional budgets

The decline in own income in April-May amounted to 26%, that is, the regions lost 590 billion rubles. compared to the same period in 2019, which is 5% more than their own annual income. And the money allocated from the federal budget (288 billion rubles) was clearly not enough. In addition, compensation decisions were made in secret, and many regions were compensated from one-sixth to one-third of the lost income.

5. On the income of the population

If in 2014-2019 they fell by 7%, then only in the II quarter of 2020 - by 8%. As a result, about half of the middle class moved into the lower middle class . And all because, the analyst believes, that the actions of the authorities were inadequate and inconsistent, moreover, both antiquated and anti-crisis. All of them were late because Putin did not recognize the reality of the pandemic in any way, dreaming of zeroing the presidential deadline on April 22 and holding the Victory Parade on May 9. And only at the end of March Sobyanin was able to convince him that everything was serious.

The unexpected stinginess of the authorities also played a role. Western states allocated 10-30% of GDP to support the economy, and the Kremlin's first aid turned out to be only 0.3% of GDP, and only gradually increased to 3% (of which only 1% were gratuitous payments, and the rest were tax deferrals and subsidized loans). But the National Welfare Fund contains more than 10% of GDP. And they would greatly help Russian families and small businesses to endure at least three out of five blows.