Monday, March 4

How the Russian economy is recovering: a review of analysts

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Russia’s economic recovery is proceeding at a good pace

Quarantine restrictions to reduce the incidence of disease during the pandemic in a number of countries had an effect. However, at the same time, the economy was also seriously affected, with processes almost coming to a halt. This situation was particularly acute in 2020, although 2021 was also a difficult year for many countries. Russia’s economy is now recovering at a good pace, helped by the government’s decision not to introduce large-scale quarantine measures last year.
According to experts, the Russian economy did not suffer as much as originally predicted. However, it is worth understanding that even during the pandemic the authorities did not impose strict restrictions, as it was the case in many other countries.
At the same time, there are still a number of problems in Russia, among which the level of inflation is a cause for concern. It was triggered by the growth of food prices, which is observed throughout the world. In addition, the national currency has weakened compared to the dollar and euro. To reduce the impact on the economy, the Bank of Russia raised its key interest rate. This was the first time since 2018, and experts do not rule out that the rate may rise further.

The drop in the economy in 2020 was relatively small, which was a rather surprising fact, comparing all the difficulties faced during the pandemic. In 2021, the start of vaccination and the increase in the value of oil on the world market contributed to the optimistic mood on the market. However, the incidence rate in the country remained high until the end of the year, and it is too early to talk about a quick recovery. According to analysts, GDP may not reach pre-crisis levels until the next quarter.
In the near future, experts expect the number of unemployed people and people below the poverty line to drop. However, this depends not only on the recovery of the Russian economy, but also on processes in the world.
The year 2021 was a record year for the Russian Federation in terms of the volume of listings on local and foreign stock exchanges. The total amount of funds raised from listings amounted to about $10 billion, which was the highest figure since 2013. In this case, it cannot be said that only Russia is experiencing such activity – the stock market entry boom is observed in many countries. During the pandemic, there was excitement on trading floors around the world, and the optimistic sentiment continued into 2021. There was a sharp collapse in stocks in 2020, which contributed to capital inflows from new investors. The demand for assets remains high today.


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