Alexei Vedev on the Russian Economic Outlook in 2022

The pandemic has become a major shock to the global economy and most economies of developed and developing countries. The IMF and the World Bank estimated global GDP decline at 3.4% in 2020, that is, a great deal more as compared, for example, with the 2009 crisis.

However, it is only the world’s average value, while the impact of the crisis on individual countries turned out to be much higher: in 2020 economies contracted in the UK (9.8%), France (7.9%), Germany (4.6%), Canada (5.3%), South Africa (7%) and India (8%). It is noteworthy that developed countries were hit harder because of a higher level of their globalization than developing ones. According to the IMF estimates, in 2020 advanced economies fell by 4.5%, while developing ones, by 2.1%.

As regards economic recovery prospects, this period may vary greatly for different countries, however, the advanced economies, though they contracted a great deal more in 2020, demonstrate the ability to recover faster.

Alexei Vedev noted that Russia’s substantial GDP growth was driven by the low base effect in 2021. Despite recovery, some sectors’ financial vulnerability remains high. In 2022, solvency risks will persist in sectors which were hit the hardest by the pandemic (for example, transport and services), as well as for small companies.