In the article «Financial and economic crises of recent decades and their impact on the Russian economy» experts of the PRIME Economic Information Agency note that the economic crisis cannot be prevented, but there are ways to mitigate its impact on the countrys economy. In the course of the study, the authors compared the effectiveness of various anti-crisis measures and made conclusions about how optimal the existing technologies are. The article covers such events as the financial and economic crisis in Russia in 1997-1998, the global economic crisis of 2007-2009, and the currency crisis of 2014.
In the context of the economic crisis caused by the COVID-19 pandemic, Roscongress Foundation analysts offer you a detailed study of the crises genesis based on the materials we have selected for the crisis events of the last decades. In addition, the analysis of this study is accompanied with suitable fragments of video broadcasts of panel discussions held as part of business programs of the key events hosted by the Foundation.
The financial and economic crisis in Russia in 1997-1998 was of local nature and turned out to be one of the most severe for the population. However, the economy has entered the growth stage quite quickly thanks to the measures taken by the new Government.
The crisis of 1998 was local, it began in the late 90s, when the planned economy had not completely ceased to exist, and the market economy had not yet started working. Government policy led to an unprecedented case in the world history, when the government defaulted on its domestic debt in the national currency. This crisis turned out to be one of the most severe for the population.
Thus, from the Q3 of 1998 to the Q4 of 2000, the amount of arrears in wages to public employees decreased almost three times. This contributed to the normalization of the situation in the financial sphere and increased confidence in state actions.
The ruble exchange rate began to be fully formed by the market, which facilitated the accumulation of foreign exchange reserves of the Central Bank of Russian Federation and increased the stability of the countrys financial system.
The global economic crisis of 2008-2009 once again highlighted the need to diversify the economy. But the economic decline was relatively painless for the Russians thanks to measures taken by the Government in the financial and production sectors.
The global crisis of 2008-2009 sounded as a warning to Russia that the task of economic diversification, which the authorities proclaimed back in the early 2000s, has not been solved, and the dependence of the economy on energy prices has not weakened at all.
The Russian financial authorities were active, pursuing a sensible anti-crisis policy. In 2008, the budgetary anti-crisis measures amounted to RUB 1,089 billion. (2.6% of GDP), of which RUB 785 billion were allocated to strengthen the financial sector, RUB 304 billion to support the real sector of the economy.
The economic decline in Russia caused by the global crisis of 2008-2009 was the most significant among the G20 countries. For example, if in 2006-2007 GDP growth exceeded 8%, then by the end of 2008 it was already 5.2%, and in 2009 the decline was almost 8%.
As a result of the 2014 currency crisis, the ruble has devalued more than twice, leading to tensions in financial markets. Economic management has returned to «manual mode» again, as it did in 2009.
In 2014, structural problems in the Russian economy were compounded by sanctions imposed due to events in Ukraine and fall in oil prices. All this led to the currency crisis in November and December, when the ruble devalued more than twice. As a result of the Government and the Central Bank of the Russian Federation all-out efforts, the situation with the exchange rate was somewhat improved and stabilized. But this led to tensions in financial markets and, in fact, stopped lending to the real sector without special programs to subsidize interest rates. Economic management has returned to «manual mode» again, as it did in 2009.
As of 2018-2019, the Russian economy is still dependent on oil and gas exports. Such measures as stimulation of entrepreneurship and non-resource market sectors will help stabilize the economic situation in Russia in the context of possible crises in the near future.
At the moment, the Russian economy is still heavily dependent on oil and gas exports, which is the foundation for its income basis formation. At the same time, PRIME Economic Information Agency experts note that countrys economy has hardened for the four years under the US and the EU sanctions. The country had to use its internal resources to the maximum, and the economy became more balanced.
We also invite you to get acquainted with other materials on the financial and economic crises of recent decades and their impact on the Russian economy, posted in the Analytics section of the ROSCONGRESS.ORG Information and Analytical System:
· IMF Predicts Worst World GDP Recession Since Great Depression
· Review of the World Bank report «East Asia and the Pacific during the COVID-19 outbreak»
· Economy under Quarantine. What Choice do Heads of Regions Face Today?
· Macroeconomic Picture in Russia and World for Q1 of 2020
· Neoliberal Model, Economic Model and Social Inequality