Oxford experts predicted the Russian economy will recover by the end of August

The Russian economy could recover by 95% of its pre-crisis level by the end of August, predicts the British consulting company Oxford Economics using a specially developed index. At the same time, experts urge to treat the indicator with caution, writes RBC.

The Oxford Economics index takes into account nine components: COVID-19 incidence statistics, oil prices, electricity consumption, Google data on people's visits to places of work and leisure, the Watcom mall attendance index, the Analytical Credit Rating Agency (ACRA) financial stress index and the dynamics of financial flows in the National Payment System of the Central Bank.

For 100% of the index, indicators at the beginning of March are taken. The minimum value of 65% was recorded at the end of April after five non-working weeks. By mid-July, the recovery index reached 86% and remained at this level for the next month. According to Oxford Economics, this indicates the recovery of Russia's GDP in August to about 94% compared to March. How long it will take the economy to return to pre-crisis levels, the index does not give a clue.

Oxford Economics hopes that the recovery tracker can be used as an operational leading indicator, as it closely correlates with monthly GDP figures and the index of basic industries according to Rosstat. With such an application of the index, Dmitry Kulikov, deputy director of the group of sovereign ratings and macroeconomic analysis of ACRA, is ready to argue, quoted by RBC. Due to the "shallow history of some of the original series" and the resulting incomplete information about the correlation of the index and GDP, the Oxford Economics tracker is better interpreted as only one useful indicator of recovery "in a broad sense", he said.

• In the crisis second quarter of 2020, the Russian economy fell by 8.5%, according to preliminary data from Rosstat. This is comparable to the fall in GDP in the crisis third quarter of 2009 (-8.6%), but falls short of the anti-record of the second quarter of the same year (-11.2%). At the same time, Rosstat figures turned out to be better than the forecast of the Ministry of Economic Development (-9.6%) and the Central Bank (9.5-10%).
• This spring, the Russian economy experienced a double shock: in addition to the introduction of the self-isolation regime, there was a sharp drop in oil prices. They are still 20% below pre-crisis levels - in mid-August Brent was $45 a barrel.