The persistence of low world prices for oil, and also introduced the USA, EU and their allies of anti-Russian sanctions will cause Russia’s economy will remain in recession until 2019, bringing the real incomes of Russians will shrink even more, according to the forecast of Russian economy development for 2016-2020, prepared by the Institute “development Center” Higher school of Economics (HSE).
In accordance with the prepared experts the baseline scenario of economic development, the average annual price of barrel Russian Urals crude oil in the next few years will remain at $35. In this situation the state will be forced to continue to cut costs, and in the context of persistent geopolitical tensions and high activity of lobbyists from corporations and the defence industry will suffer the most social services.
Under the baseline scenario “development Center” HSE, in 2017-2019, the real wages of the average Russian will be approximately 15% lower than in 2014. How long the population, the Russians will suffer, experts hard to say, but warned that patience might run out before the end of 2020
“The stock of the loyalty of the population to the deterioration of the standard of living is not unlimited and may be exhausted in the future. Together with the growing discontent polyarchenko business it will create a pressure to change domestic and foreign policy,” the report notes. The experts clarify that such scenarios are difficult to quantify, so while they endure beyond consideration.
In particular, according to analysts HSE, many of those services that the state now provides free to the Russians, will be paid, a paid service will rise in price, and the quality of those who will receive a gift, will become worse. “The decline in the volume and quality of public services in the future is fraught with degradation of the educational and cultural level of the people, increasing morbidity and mortality, and balancing of the pension system without reform, simply due to the gradual impairment of pension liabilities — a rollback to the days of mass poverty,” — warn the authors of the report.
Cuts in social programs and the commercialization of public services and the lack of indexation of salaries of state employees (according to the forecast of the HSE, their growth will be close to zero until 2019) will lead to a new decline in real incomes. According to the estimates of experts, in 2015-2020 years the real wages of the Russian public sector can decline by 22% or even 30%. In 2016 real wages of Russians, according to analysts HSE, will fall by 5% and pensions — by 3%.
The paper emphasized that by the end of 2020, the state loses opportunities to support the economy at the expense of previously accumulated “safety cushion”. When you save the price of Urals crude at $35 per barrel, the Reserve Fund will be empty in 2017 and in 2020 will be almost exhausted and the stock of liquid funds of the national welfare Fund.
While the HSE do not exclude that in reality the price of oil could drop below $35 a barrel, which will increase the budget deficit, increase consumer and investment decline and lead to a deeper recession. But even without that, the situation in the economy will increase “much more tangible than in previous years, “pressure” on the ruling group in favor nikitinyh institutional changes within the country, as well as the normalization of relations with foreign countries”.
In early 2016, the experts of the “Center of development” has warned that the Russian economy will continue to “twist” spiral of recession.
Previously, the forecast of economic development of Russia has lowered the credit rating Agency standard & Poor’s. According to experts of Agency, this year Russia’s GDP will shrink by another 1.3%, whereas previously it was expected that the economy will be able to recover after the fall of the previous year (-3.7 percent) and will grow by 0.3%. Previously their forecasts worsened and other representatives of the “big three” rating agencies: Fitch expecting GDP to 1%, and Moody’s is 2.5%.
