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Russian economy after a year with Covid-19

The economic recession caused by the pandemic crisis and related quarantine measures in Russia continues. Today however, the forecast of GDP dynamics by the end of 2020 is much more optimistic than just a few months ago.

The peak of economic activity growth occurred in August-September. After that due to the second wave of the pandemic, Russian market began to stagnate. The further dynamics of the recovery of the Russian market will strongly depend on the evolution of the epidemiological situation. In fact, there was no full lockdown in autumn in Russia as it was at the first wave. Government introduced just a number of enhanced measures. Already in mid-January, the authorities of Moscow and some other regions of Russia lifted some measures aimed at slowing the spread of the coronavirus. For example, restaurants operate on a regular schedule, museums, libraries, schools are open, and companies are no longer required to keep 30% of employees working remotely in Moscow. Of course, a number of restrictions remain in force, but cases continued to recede over the last days of January.

Since December, vaccination with the Russian Sputnik V vaccine has begun. Since mid-January, Russians can do it free. In this regard, government expects a decline in cases by March.


GDP: 2020 results and forecast for 2021

The International Monetary Fund (IMF) has raised its forecast for Russia’s economic growth in 2021-2022. According to the updated global forecast of the IMF in January 2021 the Fund expects that Russia’s GDP will increase by 3% this year and by 3.9% in 2022.

IMF assumes that Russia’s economy can reach its pre-coronavirus size at the end of 2021 and reduced forecast of GDP in 2020 from -4% to -3.6%.  More details can be found in the ratings of other experts in the chart 1. For example, the official forecast of the Ministry of Economic Development for 2021 is +3.3%, and for 2022 is +3.4%.


Foreign trade

Foreign trade slowed down in Russia as expected. According to the Federal Customs Service, 9 months of 2020 shows that exports decreased by 21.9%, and imports by 6.3% compared to the same period in 2019. The decrease of import volumes caused by the volatility of the ruble exchange rate, high level of market uncertainty and quarantine restrictions. Decrease of oil sales, petroleum products and gas entailed export drop. According to results of 9 months of 2020, oil exports fell by 41% in USD, petroleum products – by 32%, natural gas-by 48%. The volume of commodity imports decreased insignificantly (-7% for 9 months of 2020), compared with a sharp drawdown of imports of services (-54%).

We expect that due to a gradual recovery of business activity in the global market and the softening of OPEC+ deal terms, export volumes will grow in both volumes and dollars.

If you look at the breakdown by country, the most significant foreign trade partner of Russia is China according to the results of 9 months 2020. Imports from China increased by 0.9% compared to 2019, while exports to China are gradually recovering (-14.5%). For comparison export to EU dropped by 28.6%.

As for trade volumes with Poland, according to the results of 3 quarters its share is 2.5% of all foreign trade of Russia with other countries. Exports fell by 25.7%, while imports fell by 5.5%. This decline is one of the lowest in comparison with other EU countries, for which the decline was even greater.



Current economic crisis had various impact on different sectors of the Russian economy. Assessing the net financial result of Russian organizations (profit minus loss) for January-October 2020, it fell by 38.2% year to year. In the corporate sector as a whole the loss of unprofitable enterprises increased by 3 times to 55 billion EUR, and the profit of profitable enterprises decreased by 12% to 147 billion EUR. However, five industries showed positive dynamics for this indicator: agriculture, construction, water supply and waste disposal, postal and courier services, information and communication.


Interested in this article?

The full text is available in the February ’21 issue of Credit Manager Magazine.


Author of the article:

Ksenia Timofeeva

A credit insurance broker and Business development director of ICBA Russia (Malakut Trade Credit). Kasenia started her career in credit insurer at Atradius. For the last 8 years she is working for trade credit insurance broker in Moscow, Russia.

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