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9 Mar, 2021 14:58

Benefit of sanctions & isolation? Covid-19 pandemic was 1st time Russian GDP survived economic crisis better than global average

Benefit of sanctions & isolation? Covid-19 pandemic was 1st time Russian GDP survived economic crisis better than global average

Leading Moscow academics have revealed that Russia's GDP dropped less than the world as a whole during the Covid-19 pandemic, marking the first time the country weathered an economic crisis better than the global average.

In 2020, Russia's GDP dropped by 3.1 percent, less than the 3.5 percent drop in the global economy, according to the Development Center of Moscow’s Higher School of Economics.

The report published last week noted that the drop in GDP was slightly worse than the 2015 economic crisis (-2.0 percent) but better than the 2009 global recession (-7.8 percent).

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"This result is particularly noteworthy against the backdrop of the strongest recession in the world economy since the mid–20th century," the report says. "For the first time in the entire post-Soviet period, Russia experienced a milder recession than the world as a whole, despite the fact that a strong drop in oil prices was combined with the global crisis."

The drop in GDP was significantly better than a possible fall of 7-8 percent if the government had done nothing, the analysts believe.

According to TASS, quoting HSE expert Georgy Ostapkovich, Russia's economy fared well due to the isolated nature of the country's manufacturing. Unlike much of the rest of Europe, Russia's economy is relatively self-contained, meaning border closures and lockdowns had a lesser effect on production chains.

Since sanctions were imposed on Moscow in 2014, Russia has been forced to adapt its economy to be more self-sustaining. This appears to have been a benefit during the Covid-19 pandemic, with the country being less hit by the slowing-down of international commerce than many other developed states.

In February, Russia's Minister of Economic Development Maxim Reshetnikov revealed that the country is now beginning to recover, with authorities believing that GDP will reach the pre-pandemic figure sometime in the second or third quarter of 2021.

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