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Russian ministry names risk of possible economic stagnation in the country

Russia’s economy will demonstrate stagnation if global economic growth rates slide below 2%

© Mikhail Dzhaparidze/TASS

MOSCOW, October 5. /TASS/. Russia’s economy will demonstrate stagnation if global economic growth rates slide below 2%, according to the outlook for the country’s social and economic development for 2020-2022 prepared by Economic Development Ministry, which was submitted to the State Duma (lower house) concurrently with the draft budget.

"The key risk for Russia’s social and economic development through 2024 is the slowdown in global economic growth rates (below 2%)," the document said.

The current macroeconomic policy allows avoiding a decrease in Russia's GDP in real terms with the global economic growth slowing down to 2% and oil prices falling to $40 per barrel, the ministry suggests. However, a stronger decline in global economic growth rates may result in stagnation, the ministry warns.

"Meanwhile, a worse deterioration in the international economic environment caused by key global economies (US and EU states) sliding into a recession may result in a situation where the Russian economy demonstrates stagnation (or a decline in GDP growth rates in real terms, depending on the depth of global recession) in the year of the described ‘shock’ event," the outlook said.

Nevertheless, amid a stable global economic situation and the lack of deterioration the accumulated reserves as well as stronger external economic ties with India and China "will help the Russian economy recover growth quite fast," the ministry added.

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