RUSSIALINK: “Economic crisis likely not to be protracted; not all risks from coronavirus removed yet – Manturov” – Interfax

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MOSCOW. July 7 (Interfax) – The current signs of recovery suggest that the economy will not become bogged down in a protracted phase of the crisis, Industry and Trade Minister, Denis Manturov, said on Tuesday during the online international industrial marathon, Innoprom, which is a platform uniting exhibition events, online sessions and congresses, as well as educational workshops.

“Of course, it is too early to say that all risks have been completely removed; however, there are preconditions that we are not bogged down in a protracted phase of the crisis; and, actually, the World Bank forecasts this. The global economy this year is expected to drop 5%, and then rebound 4% next year ‘from the low base’,” the minister said.

“The entire world today is seeking a compromise between complying with epidemiological restrictions in order to protect the health and safety its citizens, as well as their well-being that could only be ensured in a fully functioning economy that faces a number of serious challenges,” Manturov said.

“Contracting demand in commodity markets and falling prices for oil, gas and metals as well as for even mineral fertilizers, also poses risks for related industries even though experts already forecast a gradual recovery in commodity prices,” the minister said.

“Household incomes have sagged during the period of self-isolation, causing cracks in the consumer economy and leading to a decline in the sales of clothing, electronics, automobiles, and real estate. However, as economic activity revives, the sharp increase in unemployment halts,” Manturov emphasized.

“Thus, we could count on restoring purchasing power and gradually improving the situation in sectors oriented toward consumer demand. The same could be said for the transport engineering industries that depend on the pace of recovery in the transport of freight and passengers,” he said.

“Even today’s difficulties that the entire global system of the division of labor has experienced ‘in the moment’ have been resolved. Now, most of the established global networks of collaboration have started operating again, or alternative suppliers of components have been found,” the industry and trade minister said.

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