Russia's GDP May Fall 3-5% Year-on-Year In 2020 - Accounts Chamber Head

MOSCOW (UrduPoint News / Sputnik - 02nd April, 2020) The Russian economy may shrink by 3-5 percent year-on-year in 2020 or even approach the situation similar to what occured during the 2009 crisis, when the gross domestic product fell by almost 8 percent, Russian Accounts Chamber head Alexey Kudrin said on Wednesday.

"Over the past two weeks, forecasts for the Russian economy, including the global economy, have, of course, become more pessimistic. And now we can expect that in a quite moderate scenario, the GDP may fall significantly this year, from 3 to 5 percent. The situation may be similar to what was in 2009, when the GDP fell by almost 8 percent," Kudrin said at a meeting between Russian President Vladimir Putin and members of the government.

This year, the Russian economy may require state support in the amount of 5 percent of the GDP or even higher, Kudrin said.

"In that crisis [in 2009], we spent almost 10 percent of GDP on support. Half of that sum was directed to the capitalization of banks in various forms, and a significant part, of course, came as compensation for the shortfall in Federal budget revenues and additional assistance to businesses in different forms. Now the situation is unconventional, and is likely to require support from 5 percent of GDP and more even if the GDP does not fall as low as then [in 2009]. I know that the government is already preparing measures, and I strongly support what has already been said here," he said.

He recalled that during the global financial crisis in 2009, the average oil price was $61 per barrel. This year, the oil price will be significantly lower, Kudrin said.