Most acute phase of COVID-19 influence on global economy unlikely to exceed half a year

Most acute phase of COVID-19 influence on global economy unlikely to exceed half a year

The most acute phase of the coronavirus impact on the global economy will not exceed two quarters while the extensive measures assumed by the governments and central banks will enable the global and Russian economies to recover quite fast, the Russian Central Bank’s Research and Forecasting Department said in a note on Wednesday, TASS reports.

"The most acute phase of the coronavirus spread's toll on the global economy is not likely to exceed two quarters," according to the note. That is due to the peculiarities of the pandemic spread, as well as improvement of measures to treat COVID-19 patients and prevention of further spread of the virus, the regulator explained.

A notable weakening of the Russian currency following the oil prices drop coupled with a temporary upsurge in demand for non-perishable goods have an impact on inflation, though it will be temporary and short-term, the Central Bank’s analysts suggest. "Apart from the recent ruble’s weakening, disrupted supplies from other countries may become an additional pro-inflation factor from the side of supply in coming months," according to the note. Meanwhile, the regulator expects inflation to stabilize around the 4% target in 2021 after the expected acceleration, particularly due to its current monetary policy.

Moreover, the extensive measures assumed by governments and central banks will enable the global and Russian economies to recover quite fast in case of the coronavirus infection resolution, the note pointed out. "Considering the extensive support measures assumed by governments and central banks the global and Russian economies may be expected to recover quite fast in case of the pandemic’s resolution," the Central Bank’s analysts believe.

However, a depleted economy due to efforts to tackle the pandemic may trigger the second wave of the coronavirus infection outbreak in Russia in 2020, the regulator warned. "Meanwhile, the second wave of the coronavirus outbreak cannot be ruled out by the end of 2020 when a new season of cold-related and respiratory diseases starts. Moreover, a depleted economy due to spending on measures to prevent the spread of the virus may contribute to that," the note reads.

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