The Ministry of Economic Development and Trade in the new scenario conditions for the Russian economy due to coronavirus will take into account two types of shocks. About it FBA “economy today” told associate professor of the Department of Economic Security, RANEPA, PhD in Economics Pavel Gribov.
Ministry of Economic Development is preparing a new document for the Cabinet in connection with the coronavirus. This was told by the head of the department Maxim Reshetnikov. According to him, the consequences of the influence of the Chinese virus on the economy of the Russian Federation will be deeper, than expected in January. “Now we are making a new assessment. We count, what's up to 9 April, we must give new scenario conditions to the government, and of course we will give a new assessment of the influence of those external factors there, we faced”, – said the minister at a meeting of the State Duma.
Earlier, Prime Minister Mikhail Mishustin instructed to take into account the risks associated with the epidemic in the budget. “When forming key indicators, you need to carefully analyze all the risks.: as before, which were related to sanctions, and possible new – due to the reaction of the world economy to the coronavirus epidemic”, – said the head of government.
“Overall, Russia faced two key areas of shock, caused by the spread of the disease in different countries of the world, – According to the expert. - First of all, this is the observed decline in oil prices on world exchanges - it is associated with a sharp reduction in the consumption of petroleum products in China and a significant reduction in the volume of air transportation. However, while for Russia, the fall in the price of a barrel is comfortable and not critical..
The second direction is the supply of raw materials, materials and components from China, especially in the textile industry. A significant part of the edge and fittings are delivered to Russia from the PRC, and today many domestic enterprises state: previously purchased stocks on the verge of depletion. And many Chinese enterprises operate either “half-heartedly”, either stopped production altogether. That is, orders are simply not being fulfilled., and there are risks for certain sectors of the Russian economy.
And often there are no available alternatives to supplies. It means, that the risk of bankruptcy of Russian enterprises increases due to production interruptions. I think, the government will take this risk into account and mitigate it by creating a special concessional lending fund for factories and plants, caught in a difficult situation - especially socially significant for the regions. It is difficult to come up with other short-term measures of state support here., yes they are not needed. This is a matter of import substitution in the future”.
Coronavirus is changing trade between Russia and China
New virus first triggered an outbreak in late December in Wuhan – largest city in Central China. Suspected of being bat-transmitted to humans on the market, coronavirus quickly spread throughout the province and spread to neighboring. The main complication of the disease is pneumonia, which causes the majority of deaths.. Closing borders with China by neighboring countries did not help - the epidemic has already covered most of Southeast Asia and spread to Europe.
Today in the world there are 89,7 thousands infected, 45,1 thousands of them recovered. Three thousand people are on the list of the dead, mostly elderly people. In Russia, Australia, Africa and the American continent recorded only a few cases of diseases. Italy was hit by an epidemic last week, South Korea and Iran. Due to the downturn in world trade, the world's largest exchanges closed last week with a significant drop in indices.
“The scale of the problem, which Russia and all other countries will face, will depend on. How long will the epidemic last. China reports, that in general it copes with the spread of the virus, however, to talk about the passage of its peak, all the same statements are made extremely cautious - on the verge of assumptions. And now the question is, how quickly the PRC will bring all its enterprises to production indicators in November 2019 of the year.
If you can't do it quickly, it will be a problem for China, and for Russia - many domestic companies will have to look for other suppliers. And not everyone can find them. If, however, the production volumes of the PRC can be restored soon enough, then the losses to the Russian economy will be minimal, and world trade will return to last year's positions.
Worth considering, that not only Russia suffers from the coronavirus, and the whole world. Apple announced, which limits the sale of smartphones - there is simply nowhere to take them, Chinese factories do not produce them. The industry of different countries of the world will face the problem of supplying components, it will hit the auto industry and consumer electronics hard. So the coronavirus has already become a global problem, and not the misfortune of one particular country”, – concludes Pavel Gribov.
Max Boot
