Yevgeny Gontmakher: “We are in a very hard downward trend. And it's for a long time"

Yekaterina Maksimova

- After the February events, some of your colleagues gave the following forecasts: April - the first actual signs of the collapse of the economy, in the summer we will see the beginning of the end. Began?

- Let's then decide what it is - the end. If you imagine some kind of situation where everything collapses, shops are empty, transport will not run, utilities will not be provided, then I don’t think that such an end awaits us. Such an apocalypse, which I described, is hardly possible. It is very important.

But what is happening now throws us quite far - towards the third world countries.

Our economy is still quite stable. In the best of times, at the peak, and this is somewhere before 2013, according to the world classification, we got into the category of “medium developed countries”. And we were already at the level of some countries of Eastern Europe: in terms of economic development, in terms of GDP per capita, even in terms of population income, in a sense, we caught up with the Europeans. Croatia, Serbia, Bulgaria, Romania - we were already close to them.

Yes, we have a certain basis. We don't fall down, we slide down. Slowly. And in this sluggish regime, when our economy is degrading, we can live long enough.

- How long?

- It can last more than one year. There is no point in guessing, because we are very seriously dependent on external circumstances. Even with such a colossal number of sanctions, which are gradually making our economy weaker, primitivizing it, the economy will continue to exist. It just reminds me of the 90s. And people will somehow survive. But get ready: it's for years. If there are no shocks external to the economy, this can continue for quite a long time.

- German Gref believes that we will be able to return to the level of 2021 in 10 years...

- Only he clarified: if nothing is done, then in 10 years we will return to last year's level. You see, this is generally a difficult prospect. What if you do something? Okay, 5 years. True, it is not clear what to do, but even if it will be 5 years.

It seems to me that German Gref somehow said about 10 years not without reason, because the 90s sit in his head like an analogy. And the analogy is clear. In the 90s we had a protracted chronic crisis. These were also years of falling real incomes of the population, some recovery, and then a sharp drop due to the 1998 default. And it lasted 10 years.

- But many families then literally starved. Isn't this part of the apocalypse you described at the beginning?

- Our current slide down is a gradual transition to the survival of many families. Moreover, survival is so literal, when people will count every penny. When families begin to deny themselves the purchase of the most necessary - from clothes, shoes. Some services will be denied. Well, cut your own hair, don't use dry cleaning, don't go to cafes and restaurants where some people used to go. This will no longer be available to many.

And it has already begun in many layers. Yes, Moscow is not yet an indicator, because you walk around the capital, you look - full of cafes. In some cities this is already there, the first signs. Maybe not very noticeable.

- What is your forecast, when will we massively and noticeably begin to become impoverished?

- Autumn winter. Summer always softens the situation, people are sitting in the country, the weather is good. By autumn, this will already be seen absolutely clearly, even in Moscow.

- Since May, regions and regulators have been trying to hide the main economic indicators that help assess the current situation in the regions. Because the numbers have already fallen irreversibly?

- Everyone's situation is different. Moscow, St. Petersburg, Yekaterinburg are one thing. And if we take regions that are weaker both economically and financially, then yes, negative trends are already clearly visible there.

We see official data on the decline in real incomes for the first quarter - by 1.4%. This, of course, is symbolic, but the whole situation, in fact, began only in March. And that already with a minus! Now data on real incomes of the population are updated only quarterly. Let's look at the statistics for the second quarter in July. There will be a downside. And more significant.

In some regions the situation is worse. For example, in industrial regions, where there is one or two industrial enterprises per one large city, which are now either working at half strength or have stopped altogether. Simply, for example, there are no accessories. Or logistics has become different - components are not brought in, because it is not clear how to deliver them.

"Avtotor" in the Kaliningrad region, the same AvtoVAZ in Togliatti. And there are already many such examples. Here and there. But there is no release of people yet. This is important, they are not thrown out into the street, they do not formally become unemployed. They just take a pay cut.

- Yes, that's why so far the unemployment statistics are not so frightening, although a huge number of people have been transferred to the minimum wage.

- Unemployment statistics are always sly and in any country. She does not lie, but she fixes the situation purely mechanically. You know, like a camera. That's how many people received the status of unemployed. And how long were they in this status? What are the trends of the so-called underemployment? And other other questions that this figure does not answer.

The unemployment rate for Russia is not an indicator at all now, because - yes, many are not officially fired. It is necessary to look at the real incomes of the population. Here is a clear indicator.

And here already in the first quarter there is a small minus, in the second quarter, I think, the minus will be 5-7%, no less. In Moscow, maybe for now it will be somewhere around zero, and in some regions even minus 10%. Then there will be the third quarter, where there will be the same minus and maybe even more.

You understand what the problem is: all the previous crises that were in Russia, including the coronavirus pandemic, passed quickly: incomes fell, and then they recovered in a short time. And now, unfortunately, we have a crisis for a long time. I repeat once again: we are slowly but steadily sliding down. And we do not see any prospects that we will crawl up somewhere for the next 2-3 years.

- Regions will also start to get poorer, lose income. Moscow will help them?

- The trend is the same everywhere, it just varies over time. What we see now in some poor regions will come to richer regions after some time. The trend in Russia is the same everywhere.

When it comes to tax collection, everything depends on economic activity. The economy will be in the red this year by about 15-17%. Some believe that the decline in GDP will be 20%. Well, even if 15%, it's a lot. Next year, according to official figures, there will also be a minus. Which one is not yet clear.

And then the question is: where will the taxes come from? The same income tax - for this, organizations must work and make a profit. Personal income tax is the same: if people's incomes are declining, and salaries will be reduced in a number of industries, then where will personal income tax come from? What can be done? Nothing, you can only print money so that some obligations of the state are fulfilled.

- Will they print?

- Not yet. We still have professional people in the financial bloc who understand that printing money now is inflation. Inflation has just been lowered a little after a significant spurt in March. People saw it all, felt it on their wallets. It {inflation} is, but the rise in prices is what worries people the most. Rising prices and poverty.

If we start printing money now, inflation will go up again. I think that our authorities will not print until the very end. Until the last.

They will save money and provide targeted assistance to pensioners, the disabled, and families with children. For the time being, the state can spend several hundred billion a year on such support.

But, that's for now. Now the budget, as it is not paradoxical, receives decent revenues due to high oil prices. Further, due to the oil embargo, revenues will gradually decline, but very high prices in rubles still allow you to get quite decent amounts to the budget.

Therefore, now something like that is being consolidated there and there are some opportunities for social interventions, but in two years, I'm afraid, it will be more difficult to do this.

- Ministers make some fragmentary forecasts, everyone says that life will never be the same. And one more thing, that "it's a pity - at the bee." Is this all the information the Russians deserve?

- And what can Mr. Manturov [Minister of Industry and Trade of the Russian Federation Denis Manturov] say, besides this joke about a bee? There is nothing more to say, because there is really nothing to replace IKEA. We see these attempts to replace McDonald's. I would say - clumsy attempts.

We won’t be able to replace much at all, everyone is talking about it. And 100% import substitution is impossible anywhere, in any country in the world.

You can say whatever you want and joke as you like, but let's take, for example, airplanes. Well, we will not be able to produce Airbus. We have some of our own developments, but, firstly, the Sukhoi Superjet mostly consists of imported components, and secondly, it is a medium-range one. These are just different categories of aircraft. Or the same MS-21 - how many years will it take to put it into production?

Cars. Another good example. A simplified Lada Granta with Euro-2 emissions, which have long been abandoned even in Russia.

Right now we see how the market is emptying, and there is nothing to replace it.

So Manturov should come out and tell the truth? "Guys, we can't." Afraid, I don't know. And there is, apparently, an attitude to sow optimism.

- It is even mentally impossible to accept that 10 years ago the greatest country was compared with tiny Croatia, and soon they will put an equal sign with third world countries.

- This is a question for our society: is it ready to put up with it. But I think a lot of people still don't understand running processes. Most Russians think that all this is temporary, some miracle will happen and we will return to where we came from. Conditionally, to the situation at least in 2021.

Although even our president said that in 10 years we will live better. He recently said. Also 10 years old! That is, the head of state understands the future, but the people somehow still hope for the king, for God, for a miracle. As long as people have strong faith that something will be done at the top, everything will return and everything will be fine. This is irrational.

Even sociology does not show this. Although, according to opinion polls, more and more people began to feel that their life has become worse, and expectations are growing that are not very good, which will be even worse, but somehow people treat this almost philosophically. What will happen next I do not know. This is a question for society.

What if this miracle happens? The Ukrainian conflict will subside, Europe and the United States, which is also difficult now, will play everything back. Are we going back to where we came from?

- If it's a miracle, then we won't be back anytime soon. Even if there is some kind of peace, the acute phase will end, but Europe will definitely wait, and the United States. They will need time.

Don't forget, there is also public opinion, there are parliaments where these decisions regarding Russia were made. And it was under the pressure of public opinion that many sanctions were introduced.

Plus, a significant part of foreign business left Russia on its own, without any sanctions. Simply because public opinion told this business: if you do not leave Russia, then we will boycott you in the entire West. Business has weighed the pros and cons - they may lose their entire business if they stay in Russia. And of course they left.

Therefore, some kind of solution to the conflict in Ukraine is not a fact that the situation will unfold. It's just not a fact. It will take some more time, maybe more than one year, when some companies slowly start to return, sanctions are lifted. It's a long story. And this miracle will not happen, unfortunately.

While we are in a very hard trend down. What's next is hard to say.

- Traditional advice from an economist for our readers: how to prepare for a protracted crisis, what to do with your assets.

- Everyone should have their own strategy now.

It all depends on how much money people have. Russia is different. Most families have no savings at all. What kind of talk about the preservation of assets can there be? These people save money on everything. They will just save more. By the way, the average check in the grocery store has become smaller, that is, people have already begun to buy less.

If you have a small savings, it might be worth buying something. While it is, but you put off the purchase. This product will either disappear or become more expensive.

Who has decent money is a separate issue. I don't know what will happen to the currency. Nabiullina promised that there would be no confiscations and frosts, but I would keep the money in cash, but this is also a problem - to keep a large amount of money under the pillow.

It's hard to say, I don't know. I don't understand the situation. Let everyone act according to their faith in the worst. If you believe the words of the head of the Central Bank, keep your money in the bank. And who is sure: since they said there will be no frost, then it will be for sure, then take it off, put it under the pillow.

The time for rational strategies is over. Including in matters of their savings. Because nothing is clear, unpredictable. Decisions we don't even know about can be made at any moment.