Fitch predicts stagnation in Russian economy after coronavirus
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Fitch predicts stagnation in Russian economy after coronavirus

8 February , 20:15EconomyPhoto: yur-gazeta.ru
After overcoming the coronavirus crisis, the Russian economy is likely to return to its usual stagnation, analysts of the international rating agency Fitch say.

Analysts predict that this year the country's GDP will grow by 3%, which will actually offset the losses of last year, estimated by Rosstat at 3.1%. The rate of economic growth in 2022 will slow down to 2.7%, in subsequent years, preconditions for economic growth by more than 1.2% are not expected, experts say.

Despite the fact that the country continues to pursue a restrained fiscal policy, having accumulated to date the lowest level of public debt in relation to GDP compared to other developing countries, the growth rate of the Russian economy will continue to be affected by high geopolitical risks and limited prospects for structural reforms. analysts of the agency believe.

At the same time, analysts believe that there is no need to expect new sanctions against Russia from America in the near future. "The new administration will need some more time to develop a strategy in relations with this country, so no new US sanctions are foreseen in the short term", - Fitch notes. In the long term, analysts do not exclude new sanctions related to the completion of the Nord Stream 2 gas pipeline, as well as against foreign investors in the country's public debt, banks and Russian oil and gas companies.

The agency predicts that the country's public debt will reach 21% of GDP in the next two years, while inflation in the country will slow down to 3.9% (according to official data from Rosstat last year, it amounted to 4.9%) in 2021 and will remain at the level of 4% in subsequent years.

The potential for GDP growth of over 1.2% in subsequent years is possible with the reform of property rights and the judicial system, as well as the elimination of institutional restrictions on investment by private companies. Otherwise, the growth rate of the country's economy will remain within 1.2%.

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