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Effect of the Pandemic on the Education Economy

Alexey S. Tishchenko – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia), PhD in economics. E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In relation to the coronavirus pandemic in Russia, restrictions have been imposed on the movement and employment of the population, the activities of organizations, including those working in the sector of education. The article explores the effect of such measures on the Russian education system. Financial risks of various types of educational organizations, including preschool, school, professional educational organizations, universities, and organizations of additional education, were assessed. In addition, attention is paid to the financing of commercial organizations, distance education technologies and the admission of foreign students.

Conclusions are made about the financial stability of educational organizations under restrictions as of mid-April 2020. The most vulnerable organizations were preschool and additional education, primarily related to the private sector. Based on the analysis of official statistics carried out an assessment of the potential losses of such organizations.

Key words: economics, education, coronavirus pandemic, loss assessment, systemic risks, distance learning.

Import of Investment Goods During COVID-19 Pandemic in Russia

Pavel N. Pavlov – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In early 2020, due to the slowdown in business activity, the weakening of the national currency and a sharp decline in demand for a number of imported investment goods, favorable prerequisites were formed for activating an industrial policy in the field of supporting domestic transport machine building and intensifying import substitution programs right after the most acute phase of the development of the COVID-19 pandemic in Russia. The main large groups of investment goods for which measures of state industrial policy can be particularly effective are light and freight vehicles.

Key words: import, investment goods, import substitution.

Guidelines for Expansion of Measures Aimed to Support Small and Medium Businesses Amid Pandemic in Terms of Reduction of Tax Burden on Labor (Insurance Contributions)

Vladimir V. Gromov – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Nikolay S. Milogolov – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Ensuring economic stability disrupted in the wake of forced lockdown rises to the fore implementation of tax policy aimed at proactive, comprehensive support of businesses in order to avoid growth of unemployment and decrease of incomes of the population. That is why an especially important role is given to the incentives in the sphere of insurance contributions which affect the financial capacities of employers to maintain employment rate and payroll. Taking into consideration analysis of already implemented measures the article substantiates further steps towards reduction of the tax burden on payroll amid hard economic conditions.

Key words: deferral, employment, instalment plan, rebate, reduced rate, social security contributions, tax burden.

Unconventional Measures of Monetary Policy Amid the New Macroeconomic Environment

Eugeny L. Gorunov – Researcher of the Gaidar Institute; Lecturer in the Department of Finance and Monetary Relations, Russian Foreign Trade Academy of the Ministry for the Economic Development of the Russian Federation (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.  

Coronavirus-induced global crises has already severely changed monetary policy in developed countries. Although some unconventional measures of monetary policy were implemented in the context of the 2008 crisis, it was supposed that they would have a limited and short-term nature. However, today there are grounds to believe that unconventional monetary policy is a far cry from short-term nature due to the new global crisis.

It is rather probable that the change of the conventional monetary policy will be happening (including in forms analyzed below) in the course of the coming decade. In the meantime, for various reasons, unconventional policy measures should not be analyzed as timely for emerging market economies including the Russian economy.

Key words: monetary policy, unconventional measures of MP, coronavirus.

Measures of Financial and Non-Financial Support to Small and Medium-Sized Enterprises (SMEs) in the Wake of COVID-19

Antonina D. Levashenko – Senior Researcher, Head of the Russian Centre for Competence and Standards Analysis of OECD (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Alexandra A. Koval – Younger Researcher of the Russian Centre for Competence and Standards Analysis of OECD (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Small and medium-sized enterprises (SMEs) are more exposed to pandemic risks compared to large businesses. To support this sector during the crisis, it is necessary to implement measures of financial (direct funding, tax incentives, etc.) and non-financial support.

Key words: small and medium-sized enterprises (SME), financial and non-financial support of SME, pandemic.

Inflationary Processes in Russia in a Context of Crisis

Alina M. Grebenkina – Junior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Natalja V. Makeeva – Junior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Elena V. Sinelnikova-Muryleva –Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Inflation in Russia has long been being below target, which provides an opportunity for a stimulative monetary policy. In condition of crisis a moderate increase of inflation to the target level has positive effect on the economy. According to estimates, 4% inflation target remains optimal and currently there are no structural reasons for its revision.

Key words: optimal inflation, welfare costs of inflation, сrisis.

Development Trends of Small and Medium-Sized Enterprises Amid Pandemic-Induced Crisis

Stepan P. Zemtsov – Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration; Senior Researcher of the Gaidar Institute, Candidate of Geographic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Yulia V. Tsareva – Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Against the backdrop of coronavirus pandemic-induced economic crises, small and medium business sector oriented towards off-line services provision has been worst-hit. In reality, demand for services provided by catering, entertainment, tourism, hospitality, beauty-business, and non-food retail has declined several-fold amid lockdown. This being said, the need to pay wages, taxes, social contributions, rental charges, bank credit interest, and contractors for supplies and other services has remained. All types of businesses who missed the chance to switchover to online services provision or stick to business model for rendering exclusively personal off-line services to date are exposed to bankruptcy risk.

Cash gap is on the rise that can lead to bankruptcy of multiple small and medium-sized enterprises (SME) unable rapidly and without losing work performance to switchover to the online regime especially in large Russian cities. In this memorandum we present assessment of the crisis impact on income, employment, lending, and the number of SMEs.

Key words: small and medium-sized enterprises (SME), pandemic, crisis.

Russia’s Balance of Payments in Q1 2020

Alexandra V. Bozhechkova – Head of Monetary Policy Department of the Gaidar Institute; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Сandidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Alexander Yu. Knobel – Head of Foreign Trade Department of the Gaidar Institute; Director of Center for Foreign Trade Department of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute; Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

The first quarter of 2020 saw the positive Russia’s balance of trade to plunge on the back of contraction of exports value amid plummeting crude oil prices with stabilized imports volumes. Due to the decline in foreign liabilities and growth of assets in foreign banks and enterprises, net capital outflow was observed in the private sector. In the contexts of negative external shocks, ruble’s exchange rate against dollar plunged by more than 20%.

Key words: balance of payments, export, import, current account transaction, ruble exchange rate, outflow/inflow of capital, Bank of Russia.

Survey of Current Business (February-May 2020)

Sergey P. Aukutsionek – Head of Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Andrey S. Yegorov – Senior Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences, Candidate of Economic Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Inessa A. Bachirova – Senior Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Tatyana V. Serzhantova – Senior Researcher of the Center for Transition Economy Studies, Primakov National Research Institute of World Economy and International Relations, Russian Academy of Sciences (Moscow, Russia). E-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In February 2020, the diffusion index of the order-book level reached its highest value in the last 8 years (57). The diffusion index of output reached 51. For the fourth month in a row, the share of enterprises that do not intend to take new loans from banks in the next 3 months continued to decline; in February 2020, it fell to 38%. Last time it was this low in 2008.

Among the factors restricting capital investment, the overall uncertainty of the situation moved to the second place in the rating (+11 percentage points within a quarter).

Key words: Russia, industry, industrial enterprises, price level, wages, employment, output, investment, indebtedness to banks, order-book level, stocks of finished products, capacity utilization rate, financial situation, production restrictive factors.

Execution of the Federal Budget in Q1 2020

Sergey G. Belev – Head of Budget Policy Department of the Gaidar Institute; Senior Researcher of the Budget Policy Department, Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Tatyana V. Tischenko – Senior Researcher of the Gaidar Institute; Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

At the period-end of Q1 2020, the federal budget ran a slight surplus, however it was a temporary result because oil and gas revenues go into the budget in a timely manner and they record a downturn against Q1 2019. Non-oil and gas revenues although went up but that was due to the fact that they are received with a quarterly lag.

On the whole, the situation with the pandemic spread sets a junction for the fiscal policy: to finance the shortfall of non-oil and gas revenues (potentially for regions’ budgets coupled with extrabudgetary funds) primarily from borrowings (in accordance with the current fiscal rule) or by extensive use of the NWF funds (deviating from the fiscal rule).

Key words: federal budget, revenue, oil and gas revenues, non-oil and gas revenues, expenditure, taxes.

Current State and Prospects for the World Oil Market

Yury N. Bobylev – Head of Mineral Sector Economics Department of the Gaidar Institute; Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Andrey S. Kaukin – Head of Department for System Analysis of Sectoral Markets of the Russian Presidential Academy of National Economy and Public Administration; Head of Sectoral Markets and Infrastructure Department of the Gaidar Institute, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Eugenia M. Miller – Senior Researcher of the Russian Presidential Academy of National Economy and Public Administration (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

OPEC+ agreements on joint efforts to limit production have become a significant stabilizing factor on the global oil market. Despite the adherence to the commitments according to the OPEC+ deal on the joint efforts to cut production, during Russia’s three-year participation in the deal as a whole the annual crude oil production in the country increased by 2.4% on the back of stabilized world crude oil prices. Collapse of the OPEC+ deal has created risks for the outbreak of the price wars, which threaten the private Russian companies with losses being unable to ramp up production without opening new projects. The renewal of the deal meant that Russia could avoid a feasible imposition of duties by the US and Canada, attacks on customary market outlets by Saudi Arabia; overloading of storage capacities.

Key words: crude oil, global oil market, OPEC, OPEC+, oil prices.

Scenarios of the Development of Economic Situation in Russia in 2020-2021 and Challenges for Economic Policy

Alexey L. Vedev – Head of the Center of Structural Research of the Russian Presidential Academy of National Economy and Public Administration; Leading Researcher of the Gaidar Institute, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Sergey M. Drobyshevsky – Scientific Director of the Gaidar Institute; Head of Macroeconomic Research Department of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences, Associate Professor (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Alexander Yu. Knobel – Head of Foreign Trade Department of the Gaidar Institute; Director of Center for Foreign Trade Department of the Russian Presidential Academy of National Economy and Public Administration, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Ilya A. Sokolov – Head of Budget Policy Department of the Russian Presidential Academy of National Economy and Public Administration; Director of Institute of Macroeconomic Research, Russian Foreign Trade Academy of the Ministry for the Economic Development of the Russian Federation, Candidate of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

Pavel V. Trunin – Head of Center for Macroeconomics and Finance of the Gaidar Institute; Leading Researcher of the Russian Presidential Academy of National Economy and Public Administration, Doctor of Economic Sciences (Moscow, Russia). Е-mail: This email address is being protected from spambots. You need JavaScript enabled to view it.

In 2020–2021 Russian economy will be under the effect of three shocks adversely affecting the dynamic of the principal indicators of socio-economic development. Depending on the scenario of external conditions (pandemic timeline, crude oil prices) decrease in Russian GDP in 2020 can constitute from 7 to 12%, this being said, in 2021 the economy is expected to grow by 4.5–7.0%.

In this context, budget deficit of the extended government in 2020 can according to the worst scenario exceed 11% of GDP even without bailout and stimulus package to finance which in addition to NWF the government will have to borrow on the domestic debt market in the amounts exceeding risks of sustainable public debt of Russia.

In 2021, budget execution will improve, however, even with oil prices staying at the base price according to fiscal rule deficit can amount to 3.2–4.0% of GDP.

Key words: macroeconomics, socio-economic development, scenarios of development for 2000–2001.