The European Commission expects Russia’s GDP to decline 5 percent in 2020 due to the impact of the coronavirus pandemic. If the prediction proves accurate, it would represent a decline twice as severe as the 2.3 percent drop experienced in 2015, which was caused by falling oil prices and Western sanctions over the annexation of the Crimea.
At the same time, the European Commission has upgraded its forecast for Russia’s GDP growth in 2021 from 1.5 percent to 1.6 percent. “Russia faces a double hit from sharply lower oil prices and lockdown-driven deceleration in domestic demand in the context of the COVID-19 outbreak. Against this backdrop a sharp slump in economic activity is expected in the first half of 2020,” the European Commission wrote in its new report. Russia’s oil revenues are expected to drop by half if current price trends continue, putting further pressure on exports.
