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Russia’s economy in peril amid pandemic and oil crisis
Russia’s economy in peril amid pandemic and oil crisis

Poor Russia’s economy knows no rest. At first, it was bombarded with western sanctions. It was trying to recover from this blow, but to no avail. When things were finally looking up, the coronavirus came. And low prices as well. This double whammy was the last straw for Russia’s economy. Now it is facing mounting risks of a recession and the government is revising its spending priorities amid low oil prices and the coronavirus outbreak. The government pointed out that it would not cut federal budget spending but it would allocate funds to support the economy and its social sector. Not long ago, the authorities announced the formation of a $4 billion fund as a part of a rescue package aimed at the mitigation of the coronavirus blow.  The new aid package will include tax breaks for airlines and companies in the tourism sector and preferential loans for businesses. The economy of Russia is heavily dependent on the commodity market. This is why the government takes measures to soften the consequences of the oil market chaos. This year, state companies, such as Gazprom and Rosneft, will be allowed to delay dividend payments by six months. According to the Finance Ministry, Russia can tap its sovereign wealth fund of more than $120 billion to fill budget deficits in the coming years. Experts believe that despite all these measures, Russia's GDP will contract by 5.3% in 2020, and the government will need more fiscal stimulus to support the ailing economy.


Published: 2020-05-21 10:08:34 UTC
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