“There are several things that make the current economic downturn in Russia different. Specifically, the general unemployment rate remains low (in Moscow and Moscow oblast it stands at just 2%) but the real purchasing power of the population is falling due to inflation as pay remains constant in nominal terms only,” said Chief Adviser to the Head of the Analytical Center Leonid Grigoryev, speaking at a conference of the Franco-Russian Chamber of Commerce and Industry and the Franco-Russian Analytical Center Observo “Economic Situation in Russia: Trends and Forecasts.”
Speaking about what makes the current crisis different, the expert called attention to the fact that investments began declining back in 2013, i.e. long before the collapse of the oil prices while personal consumption fell by an average of 8% (from region to region the decline varies from 6 to 15%).
“On the whole, we are seeing quite a severe decline in economic activities but with a loss of about a fourth of foreign currency revenue from exports due to falling oil process the recession was inevitable. Whether or not the country pulls out of the recession will depend on the behavior of the households and their willingness to buy more consumer goods, and in the medium term on whether or not small, medium-sized and big companies resume investing,” Mr. Grigoryev believes.