Russian economic rescue plan

RUSSIA / FSU POLITICS - In Brief 16 Mar 2020 by Alex Teddy
On March 16 Prime Minister Mishustin announced a USD 4 billion plan to bolster the economy after the coronavirus buffeted it badly. Falling oil prices have also played havoc with the stock market and RUB. Tourism has been severely impacted, especially as the Chinese were the major nationality visiting Russia over the past several years. Many hotels and tour companies will go bust as will some low-cost airlines. Aeroflot is the flag carrier airline and it will not be allowed to fail. Soft loans will be offered to some businesses. Gazprom and Rosneft are the hydrocarbon majors. They were expected to pay up to USD 7.4 billion into the 2020 budget in the middle of the year. They will probably be allowed to pay 6 months late.March 9 saw the steepest drop in oil prices since the early 1990s. Russia achieves a balanced budget at USD 40 per barrel. Oil is now hovering in the low USD 30 pb. Moscow possesses a sovereign wealth fund of USD 120 billion. It exists for times like this. The Finance Ministry confirmed it would be dipping into the fund. Russia has confirmed 63 cases of coronavirus but no deaths. The coronavirus is fatal in 2-7% of cases. The claim of non-fatalities is hard to verify.Travel between Russia and Europe has been severely restricted but not actually banned. The border with Belarus will be closed. Belarus is hardly even affected by COVID-19. This move might be about punishing Belarus for flirting with Washington as much as about public health.

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