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Fitch Halved Russia's Economic Growth Forecast
20.03.2020 15:54
Fitch Halved Russia's Economic Growth Forecast

Fitch halved Russia's economic growth forecast. 

      Fitch lowered the forecast for the growth of the Russian economy by half. Agency revised estimates due to falling oil prices, weakening ruble and global economic downturn. 

      The international rating agency Fitch has lowered its forecast for the growth rate of the Russian economy by half - from 2% to 1%, TASS reports citing the report of Global Economic Outlook. “We lowered our forecast for GDP growth to 1% in 2020 from 2% in the previous forecast, as rising global risks, including weaker growth in China, the global economic downturn, oil price collapse and a weakening ruble are likely to affect Russian exports and  the domestic market,” the agency quotes Fitch materials.

      Fitch believes that growth will slow down in the first half of 2020, as low oil prices, weak ruble and weakened external demand for Russian exports will reduce investment. But in the second half of the year, the government will increase capital spending, and the economy will begin to grow gradually. Due to the growth of real wages and increase in social spending, private consumption remains strong, but consumer lending is slowing down due to the measures of the Central Bank. At the same time, a weaker ruble and higher inflation will undermine real household disposable incomes and affect private spending, the agency said. It believes that inflation in 2020 will be 4.3%.

      Fitch also lowered its estimate of global GDP growth by almost half due to coronavirus - from 2.5% to 1.3%. “By and large, the global economy is already in recession,” Fitch says. Global GDP will be $ 850 billion lower than expected in December, Fitch said. The agency did not rule out a further drop in the global economy if the G-7 countries impose even more stringent restrictions on the virus. Already taken macroeconomic measures at this stage will only limit the damage, however they will help stimulating growth in the second half of the year.

Author: Anna Dorozhkina

Tags: Russian economy coronavirus    

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