10 сентября 2020 г.

On August 27, CFA Association Russia held the second online event of the week. The society invited Sofya Donets, CFA, Director, Russia & CIS Economist at the Renaissance Capital investment bank. Sofya is also a long-time member of the local CFA community and served at CFA Russia’s board of directors in the past.

Sofya discussed a timely topic in today’s agenda, giving a thorough macroeconomic overview of the countries in the CIS Region in the post-COVID world.

The speaker began her presentation by identifying three trends in the economic development of the countries in the region.

First, the countries reacted to the pandemic in different ways, some introduced strict lockdown measures, while others, like Belarus, for example, refused to do that. This factor, obviously, resulted in various scenarios across the region. Countries, like Ukraine or Georgia, did well containing the virus, while Belarus had a relatively high number of cases compared to its neighbors.

At this point, most countries in the region are removing previously imposed restrictions. However, there are talks about reintroducing a lockdown again. It’s hard to tell for sure what will happen in the fall at this point, as things will largely depend on the second wave of the virus.

Second, until the next wave of the virus comes around (if it does, of course) we can clearly see the V-shaped recovery graph for all the countries. There was a big plunge right after the lockdown; however, after the restrictions were lifted, one can clearly see a universal recovery. The contraction in the region is likely to be even softer than during the 2009 crisis.

Most affected countries ended up being those that export commodities and have a high share of tourism in GDP. Russia, Kazakhstan and Azerbaijan, for example, all being oil exporters were the three most affected countries in terms of the commodities market.

“At the same time, however, simply by not traveling outside of the country, Russians can save up to USD $30-35 billion this year, which is a large sum of money. This money will stay in the country and help to boost supply and demand,” Sofya explained.

Lastly, in terms of currencies, after a plunge at the beginning of the pandemic, most currencies in the region managed to quickly recover over the summer to the extent of almost reaching the pre-crisis levels (with the exception of the Russian ruble).

One of the key factors why that happened was this time people didn’t rush to buy foreign currencies, like they did during the previous crises. At the same time, investors stayed in the region, as during the global crisis nobody knew whether taking money and investing it in other countries was a better option.

Overall, Sofya reiterated that the final macroeconomic picture of 2020 will depend on whether or not we encounter the second wave.

“If the second wave doesn’t happen or it takes place mildly, Russia has a chance to end 2020 with a 3% drop in GDP,” the expert said.

To watch a full video of Sofya’s presentation, as well as gain unlimited access to all videos from our previous events and seminars, consider joining the society using this link.








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