ALEXEY VEDEV: IN THE WORST-CASE-SCENARIO THE AMOUNT OF RUB 7 TRILLION WILL BE REQUIRED TO SUPPORT THE ECONOMY
Alexey Vedev, Head of Financial Studies Department of the Gaidar Institute, told TASS that the Russian economy can be subjected to structural changes if the spread of coronavirus will not be contained by mid summer.
“In fact, structural changes may appear. The funds allocated from the NWF will not be sufficient. According to my estimates, around RUB 5–7 trillion will be needed in case of reasonably favorable concurrence of circumstances. It is understood that by the middle of summer the epidemic will die down,” said Vedev.
According to the forecast by the expert of the Gaidar Institute, there are no inflationary risks in a worst-case-scenario, which indicates the possibility of a monetary issue to maintain the economy.
Vedev noted: “In the current situation, I do not see any threat of inflation, therefore, I think, it is possible to partially take funds from the NWF, conduct money emission, and borrow from the market. Generally speaking, it is possible to simply print around RUB 2-3 trillion. I do not understand why this option has not had a proper discussion”.
According to experts, Russia should borrow in foreign markets to fill the budget deficit, in case potential creditors find the funds themselves.
Alexey Vedev agreed: “The current situation is by all means very difficult at the overseas markets. Definitely, it is worth attempting to borrow“.
According to the forecast by the expert of the Gaidar Institute, there are no inflationary risks in a worst-case-scenario, which indicates the possibility of a monetary issue to maintain the economy.
Vedev noted: “In the current situation, I do not see any threat of inflation, therefore, I think, it is possible to partially take funds from the NWF, conduct money emission, and borrow from the market. Generally speaking, it is possible to simply print around RUB 2-3 trillion. I do not understand why this option has not had a proper discussion”.
According to experts, Russia should borrow in foreign markets to fill the budget deficit, in case potential creditors find the funds themselves.
Alexey Vedev agreed: “The current situation is by all means very difficult at the overseas markets. Definitely, it is worth attempting to borrow“.