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Russia Monthly Economic Developments

The global number of confirmed COVID-19 cases raced past the 5 million mark in late-May, after reaching 3 million a month prior. The global composite PMI sank further into contractionary territory to 26.5 in April, below its historical low of 36.8 in November 2008. Industrial output in China, however, registered positive growth for the first time this year at 3.9 percent (y/y). Oil prices reached their lowest levels since 2002 in April, with the price of Brent crude oil falling 30 percent on the month to US$23/bbl. As of May 26, 362,342 COVID-19 cases (3,807 deaths) were registered in Russia. The Russian Government and the Central Bank (CBR) continued to expand and refine their support measures to counter the socioeconomic impacts of the COVID-19 pandemic and to lay a foundation for the recovery phase. In April, the ruble weakened by 2.8 percent against the U.S. dollar m/m. The current account (CA) surplus shrank in January-April, compared to the same period in the previous year, as the trade balance narrowed largely amidst lower energy commodities prices and diminished demand. In 1Q2020, GDP growth slowed to 1.6 percent, y/y, from 2.1 percent, y/y, in 4Q2019. In annual terms, in March 2020, industrial production growth slowed to 0.3 percent, y/y, compared to 3.3 percent, y/y, in February. Consumer price index (CPI) inflation accelerated with to 3.1 percent in April 2020, from 2.5 percent in March. Labor market dynamics deteriorated in March 2020. In the first four months of 2020, the federal budget surplus (cash basis) dropped to 0.4 percent of GDP from 2.4 percent in the same period last year on the back of higher spending. Key credit risk and performance indicators remained stable in March, while credit growth dynamics were mixed. 


Apurva Sanghi

Lead Economist for the Russian Federation

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