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Economic Consequences of the Coronavirus Epidemic in Russia Amid the World Experience

Economic Consequences of the Coronavirus Epidemic in Russia Amid the World Experience

Journal of Economic Regulation, , Vol. 11 (no. 2),

The short and long-term consequences of the coronavirus epidemic on the state of the Russia’s economy are considered. They are correlated with its influence on the economy of Western countries, primarily the United States. Thus, both similar and distinctive features are identified, determined by the aspects of their past development and the economic policy nature. The features of the Russia’s economy over the past 30 years include a huge reduction in GDP, a low percent of gross fixed capital formation, the dependence of the economy on oil prices, hypertrophy of the consumer services sector, the weakness of the real economy, and the degradation of human capital. Some weaknesses of the Russia’s economy have analogues in the US economy. The measures of the Russian state to alleviate the economy and the lives of citizens during the epidemic are analyzed. It is shown that they are relatively much smaller than in developed Western countries and least of all relate to the standard of living of the population, which will adversely affect the development of the economy in 2020 and the timing of its exit from the crisis. At the same time, the way out of the crisis in Western countries, especially the United States, is hindered by the huge size of their debts. The course of the economic crisis associated with the epidemic in Russia is analyzed. Attention is drawn to the fact that already in the 1st quarter there was a drop in GDP. Based on data on the economy development in April and understanding the nature of the Russia’s economy, society, measures to combat the crisis, the experience of other countries, GDP is predicted to drop in the 2nd quarter by 29% and by the end of the year by 13%. This will be the largest drop in the world. The measures to overcome the crisis are proposed. They aim to take advantage of the crisis to ensure sustainable and rapid economic development after the end of the epidemic. This refers to a drastic increase in the share of fixed capital formation in GDP due to incomes taxation of the most-affluent section of the society, tax exemptions and subsidies to the real economy.

Keywords: Economic consequences of the coronavirus epidemic for the Russian Federation; Russia’s economy; Forecasting the development of the Russia’s economy in 2020; Measures to overcome the consequences of the crisis of the Russia’s economy caused by the coronavirus epidemic

Publisher: Ltd. "Humanitarian perspectives"
Founder: Ltd. "Humanitarian perspectives"
Online ISSN: 2412-6047
ISSN: 2078-5429