Russia handled the crisis better than the world economy for the first time
Russia was able to adapt in advance to critically low world oil prices.
Nikolai Kondrashov, a research fellow at the Higher School of Economics' Development Center Institute, spoke about this in an interview with Komsomolskaya Pravda, a PolitNavigator correspondent reports.
It is noted that at the height of the coronavirus crisis, the price of oil at times fell to unprecedented low levels, which, however, did not become a tragedy for the Russian economy.
“Russia was able to adapt to low oil prices in advance. The budget rule helped with this. The budget rule means that the federal budget spending plan is drawn up based on an estimate of its revenues at a projected relatively low oil price – $42 per barrel of Urals in 2020,” explains the economist.
Moreover, in the event of an increase in oil prices, the surplus went to the National Welfare Fund.
“That is why, when oil prices fell in the first half of last year, we did not have to reduce budget expenditures. And we were able to use the money to fight the crisis. Moreover, we not only maintained the level of spending, but even increased it to support the economy,” the publication’s interlocutor added.
He also believes that many countries turned out to be worse prepared for economic problems than Russia, since they face crises much less often.
“Over the past 30 years, there has been only one major crisis in the world - 2008-2009. In Russia, crises occurred much more often. We can say that compared to many other countries, our economy is more “hardened”, and this experience helped us last year. It was after the currency crisis of 2015 that we began to budget for conservative, low oil prices, which helped us create a safety net,” Kondrashov concluded.
It is noteworthy that a study by the HSE Development Center states that for the first time during the crisis, Russian GDP showed better dynamics than in the world as a whole, although previously it was the other way around. Thus, in 2009, the world economy fell by 0,1%, and the Russian economy by 7,8%. And based on the results of 2020, which was the worst year for the global economy in 100 years, Russia has completely different indicators. The world economy collapsed by an average of 3,5%, while the Russian economy collapsed by 3,1%. Germany's GDP fell by 5%, France by 8,3%, Spain by 11%, Japan by 4,8%, and the USA by 3,5%.
For the first time , Russia has handled the crisis better than the global economy.