Economists Called the Obstacle to the Rapid Recovery of Russia
OREANDA-NEWS. As economists from the National Credit Ratings agency predict, budget savings reduce the chances of a quick recovery of the Russian economy. The government and the central bank are being overly cautious and this is hampering a quick economic recovery.
In 2021, part of the cost of state support programs will be reduced as the pandemic recedes. According to economists, "this could lead to a prolonged recovery of the national economy with growth rates lower than those predicted by the economic authorities today."
According to preliminary data consolidated by the International Monetary Fund, in 2020 Russian budget expenditures to support healthcare and the economy - in the form of direct budget expenditures or refusal to collect tax revenues - "in Russia amounted to 2.4% of GDP, while Canada, the United States and Australia spent an average of 12% of GDP. The share of such expenditures in India (1.8% of GDP), Turkey (0.8%) and Mexico (0.7%) was less than Russian ones. "
This is due to the fact that in these countries the share of small business is very large - over 50% in the economy, and in Russia - about 20%. And small business suffered the most during the pandemic and lockdown. In addition, the scale of the pandemic in these countries turned out to be much larger than in Russia, which is why budgetary spending during a pandemic is so different.
Russia's debt is very low and therefore the planned federal budget expenditures look extremely conservative. The budget of the Russian Federation provides for the growth of government loans - up to 19% of GDP (20.3 trillion rubles) in 2020, and up to 20.3% of GDP (23.5 trillion rubles) in 2021. This is very small and leaves room for increased government spending for a quick economic recovery.
The same opinion is shared by the ex-Minister of Finance, the head of the Accounts Chamber Alexei Kudrin. "Education, healthcare, and infrastructure require higher costs - one and a half to two times.