Government: GDP to fall 5% in 2020, to start growing in Oct-Dec

MOSCOW, May 22 (PRIME) – Russia’s gross domestic product (GDP) will fall by 5% in 2020 and will start to recover at the end of the year, Economic Development Minister Maxim Reshetnikov said in a statement published late on Thursday.

"We expect that the active stage of economic recovery will start in October–December and will continue in 2021," Reshetnikov said, adding that in 2021 economy will grow by 2.8%.

Recession in annual terms is expected at 9.5% in April–June, 6.3% in July–September, 5.2% in October–December of 2020, he said. "As soon as the quarantine restrictions are eased, resumption of GDP growth is expected on the quarter starting from the third quarter," Reshetnikov said.

Russians' real disposable income will fall by 3.8% in 2020, while unemployment will surge to 5.7% of the labor force, the highest since 2011, the Economic Development Ministry said.

In 2021, the real disposable income is to rise by 2.8%, in 2022 by 2% and in 2023 by 2.6%. Retail will fall by 5.2% in 2020 and recover by 4% in 2021.

The ministry said that the average price of the Urals oil blend can fall to U.S. $31.1 in 2020 from $63.8 in 2019. Reshetnikov said that in June–December, the average price can be lower than $30 per barrel. The exchange rate of the ruble is expected at 75–76 against the U.S. dollar as of the end of 2020.

Inflation is seen at 4% in 2020.

Investment will fall by 12% in 2020 and rise by 4.9% in 2021.  Russia's exports will sink to $268 billion in 2020 from $419 billion in 2019, and will recover to $301 billion in 2021, $360 billion in 2022, $400 billion in 2023.  

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