Policies to protect the Russian economy from external shocks with a floating exchange rate, an updated fiscal rule that increases savings in Russia’s sovereign wealth fund, and a consolidated banking sector, are bearing fruit, said Apurva Sangi, World Bank Lead Economist for the Russian Federation.
Capital outflow has been low in this crisis compared to in previous ones in 2008 and 2014, when the Central Bank used significant reserves to support the ruble. Russia’s sovereign wealth fund, almost depleted a few years ago, stands at about $172 billion (12.5 percent of GDP). And, though systemic issues remain, Russian banks entered this downcycle from a position of relative strength.
"This crisis has shown that both the timing and scope of policy decisions are critical. Fortunately for Russia, there is some fiscal space to further support relief and recovery measures. This is all the more important since we do not yet know how long this crisis will last",wrote (https://blogs.worldbank.org/europeandcentralasia/under-shadow-pandemic-reflections-russias-response) Apurva Sanghi.
Speaking about Russia's economic outlook, Mr. Sangi predicts a modest recovery by 2021, but notes that GDP levels are likely to remain below pre-pandemic levels.