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05/26/20

Coronavirus (COVID-19) - Current Situation and Impact in Russia

The Ministry of the Russian Federation for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters (EMERCOM of Russia).

Although delayed matched to outbreaks in other countries, the Covid-19 pandemic has taken hold in Russia. Faced with somewhat chaotic federal response, regional administration have pursued varying techniques for combating the virus. Russia has also provided help to several foreign countries, which has led to accusations that it is using for propaganda objectives. The eventual severity of the outbreak in Russia and the impact of the steps taken by regional government and Moscow is yet to be fully known, but despite the virus appearing quite late, it is now clear that the disease is spreading fast across Russia.

What has been the impact of Covid-19 on Russia?

Moscow, as Russian capital city and economic center, accounts for the big number of cases. The number of new daily cases is rising exponentially, advising the worse of crisis is still to come. After the first death, a 79-year old patient, the death count has risen to 6,060 as of 21 April. The virus could prove mainly lethal in Russia, given the country's in demographic, which skew largely toward the elderly. Additional, there is a worry that the Russian administration is underreporting fatalities, with several elderly victims of the virus having their cause of death officially allotted to other ailments.

Going forward, the condition will challenge Russia government and society. As Putin provide aid to bolster its international image, local health services struggle with rising infection rates. The virus has already delayed the constitutional referendum schedule for 22 April that would have permitted Putin to extend his rule.

The virus is also poised to destabilize Russia growth by causing a dramatic drop in international hydrocarbon demand at a time when oil prices have already plummeting because of the price war between Saudi Arabia and Russia. The virus is already disrupting Russian markets, contributing to stock market and ruble volatility. Russia has striking economic safeguards, adding important reserves of hard currency and a powerful budget surplus, but its effectives in mitigating an financial downturn remains to be seen.

The federal administration has also recently taken steps to ameliorate the economic consequences of the pandemic, including boosting pay for medical employees, eliminating import duty on "socially vital goods," and helping businesses restructure credits. The IMF estimates that these measures cost up to 0.3% of GDP. Further, on 2 April,  Mishustin announced that the cabinet will allocate $32.9 million from the federal budget to support small and medium-sized businesses. An additional $63.2 million will given to credit-offering organizations.

The Ministry of the Russian Federation for Civil Defence, Emergencies and Elimination of Consequences of Natural Disasters (EMERCOM of Russia). 

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