3 Apr 2020 15:59

Unprecedented shock in supply, demand in Russia - Nabiullina

MOSCOW. April 3 (Interfax) - Russia has experienced an unprecedented shock in both supply and demand, Central Bank Governor Elvira Nabiullina said during an online conference on Friday.

"We are witnessing an unprecedented supply shock. Many people and businesses are forced temporarily to stop working in the current conditions, not because of insufficient demand, but because of restrictions aimed at combatting the epidemic," Nabiullina said.

According to Nabiullina, some production ties and chains are also broken. "But the shock of supply is superimposed by the shock of demand owing to lower revenues and growing uncertainty about the recovery path. An additional negative factor may be the deterioration of the financial situation of companies; therefore, by the way, measures are being taken to support them in many countries," Nabiullina said. .

Nabiullina explained that if the situation were limited only to a supply shock, then there would be a situation of "a rather deep recession, but it would quickly be followed by a compensating economic recovery."

"However, the presence of additional factors on the demand side, as well as a possible deterioration in the financial situation of companies could lengthen recovery from the recession. The pace of emerging from it will depend significantly on the situation in the international economy, in particular, on supply and demand on oil market evening out," the CBR governor said. .