MOSCOW, February 5. /TASS/. The consequences of the novel coronavirus-induced pneumonia outbreak in China may restrain Russia's GDP growth by 0.1-0.2%, experts polled by TASS suggest.
The aftermath of the coronavirus-induced pneumonia spread will be felt not only by Russia's economy, but also well beyond the country's boundaries. For Russia, the falling business activity in such sectors as retail trade, transport and tourism coupled with the oil price decline, market volatility and investors' withdrawal from risky assets will slow down Russia's GDP growth by at least 0.1-0.2% in 2020, experts interviewed by TASS said. According to the Economic Development Ministry's base case outlook, Russia's GDP growth will equal 1.7% in 2020 and rise to 3.1% in 2021.
If the spread of the coronavirus, about which Chinese authorities informed the World Health Organization (WHO) at the end of 2019, is curbed in coming weeks, the pressure of that factor on the Russian economy will be limited and stand at up to 0.1% of GDP growth rate, BCS Premier's financial analyst Sergei Deineka believes. However, in case of the negative scenario, which envisions the continued widespread of the infection within coming months, the ‘virus'-related factor may slow down Russia's economic growth rate from 0.2-0.4% to 0.8-1% of GDP in Q1 2020, he added.
Chief Economist at BCS Global Markets Vladimir Tikhomirov agrees that economic losses depend on the scale and duration of the ‘virus' crisis. "If the outbreak subsides within 1-3 weeks the impact on Russia's macroeconomic indicators will be minor. Whereas if the crisis continues expanding we may face a mounting pressure in the consumer and transport segments costing up to 0.1-0.2% of economic growth, which is weak as it is," he explained.
"Historically the slowdown of China's GDP growth by 1 percentage point slowed down Russia's GDP by 0.2 percentage points, though the importance of China as Russia's trade partner has risen over the past several years, which is why the present impact may be greater than that of the atypical pneumonia in 2002-2003," ING Chief Russia Economist Dmitry Dolgin said.
He also expects a decline in the tourist flow from China to influence negatively the ruble's exchange rate. "Every year 1.5-2 mln Chinese tourists visit Russia, transport and accommodation costs may reach $2,000-$3,000 and another $3,000-$4,000 (spent) on purchase of goods and entertainment services (per one tourist - TASS). China accounts for 5-10% of Russia's services exports. That means the negative influence on the ruble's exchange rate is possible alongside a more evident effect of the oil price drop," the expert said.
Restricted supplies of Chinese goods may carry inflation risks for Russia within a certain period, Alfa-Bank's Chief Economist Natalia Orlova said, noting that restrictions within more than one month could have even greater implications for inflation.
"Chinese imports started increasing in 2015 when the total import amount equaled around $35 bln, though the import structure has not changed much since then. From the viewpoint of separate goods, PCs, telephones, chemicals account for large shares of the import structure. The good news is that the Russian market used to be a market of final consumption for China, which is why in case of restricted imports of Chinese goods the demand will refocus on other products, probably made in Russia," Orlova explained.