Content
Some experts argue that the crisis in 2020 in Russia is an inevitable phenomenon. But they connect this scenario of development not only with the deterioration of the situation in the country's economy, Western sanctions and a possible reduction in the cost of oil. It is possible that in the near future another global crisis will break out, which cannot but affect such large countries as the Russian Federation. In particular, this opinion is shared by world-famous economist Nuriel Roubini, who predicted the previous difficult period of 2008.
Factors pointing to the 2020 crisis
In the coming year, all the necessary conditions will ripen for the next financial crisis, which will entail a global recession. This will be due to such main factors:
- Negative indicators of the development of the US economy, which indicate its obvious “overheating”: a higher inflation rate and an increase in the discount rate (up to a minimum of 3.5%) can lead to higher rates for long-term and short-term obligations. Subsequently, inflation will spread to other countries, which may contribute to higher prices in the oil markets.
- The aggravation of conflicts in international markets, where the United States will try to fight for market segments and niches with the European Union, China, Canada and Russia. This will be an additional incentive for rising inflation.
- Slowdown in the economies of other countries. China may intentionally hold back growth in order to address the issue of excessive leverage and excess capacity. And fragile and developing markets will have to feel all the consequences of American protectionism.
- Slow growth of economic indicators in European countries, due to the tightening of monetary policy. According to Roubini, Italy may face big problems: populists in power can build up external debt, as a result of which a decision can be made to withdraw from the Eurozone.
How will the Russian economy develop?
Domestic experts are more restrained in their assumptions and believe that the 2020 crisis, despite the forecasts of world analysts, is unlikely for Russia, as the latest news indicates. Even in a recession and under the influence of economic sanctions, the government manages to cope with the current situation. Accordingly, even with the deterioration of certain significant indicators, citizens should not be afraid of a global failure and collapse of the economy, although at the moment it is showing a steady decline.
Even if there is no crisis in 2020 and the pessimistic forecast for Russia does not materialize, citizens should not count on an increase in their level of well-being, increased funding for social programs, low prices and higher wages (primarily in the public sector). Despite the use of all available tools to resolve the situation and the gradual adaptation of the economy to new realities, the budget deficit can only increase, while the Russian Federation will lose the opportunity to fully borrow money in international markets (if the next sanction package is adopted).But there will be positive changes, at least the Ministry of Economic Development holds this position: according to it, next year economic growth may exceed 3%, and if Russia manages to agree on lifting sanctions, it will be able to gain access to Western investment and financing.
How high is the likelihood of a crisis in Russia, which could start at the end of 2019 and last all 2020, it will become clear in the near future, when price trends in the oil markets are clearly outlined. If the cost of a barrel begins to decline ($ 60 or less), then this is a sure sign that the Russian budget will not be able to receive a sufficient amount of revenues this year, which will increase the likelihood of acute negative phenomena in the economy next year. In any case, if a global crisis sets in, Russia cannot escape its consequences. And the greater the margin of safety, and the politics - more adequate and rational, the faster the recession will end and the recovery will begin.
Possible consequences
The reduction of social programs, the “freezing” of wages and pensions are the most serious consequences of the crisis for ordinary citizens in Russia in 2020. But judging by the latest news, there is a positive point that was voiced by Elvira Nabiullina: temporary isolation from foreign markets will contribute to the growth of domestic demand and lead to an expansion of investment in private enterprise. However, how real this scenario is for the Russian Federation will be seen only in practice, given that a decrease in purchasing power provokes frugality in the population, and not a desire to spend the last money without a clear idea when the next income will arrive.
Stagnation, recession and devaluation are the inevitable consequences of the crisis for the Russian economy, where the margin of safety and all the available tools to smooth out the situation have been completely exhausted. In order to somehow balance the budget, the government will be forced to take unpopular measures to reduce subsidies, which could provoke massive protests and increase social tension in society.
The crisis will affect the banking sector: if the ruble starts to get cheaper, it is possible that investors will want to take back their ruble investments in order to manage to buy foreign currency. At the same time, there will be an increase in the portfolio of problematic loan obligations due to the inability of borrowers to repay debts in a timely manner. Lack of liabilities and poor asset quality will reduce the number of players: some commercial banks will suffer serious losses and will be forced to declare bankruptcy due to the inability to fulfill their obligations.
Read also:
- Will there be a ruble denomination in 2020?
- Housing technologies: housing and communal services strategy in 2020
- Russian GDP growth forecast until 2020
(No ratings yet)
Loading...
