Hit by the dual whammy of the coronavirus pandemic and falling oil prices, ordinary Russians are experiencing economic hardship as the pandemic reaches new heights in the country, according to a story in the Washington Post.
Always precarious, the Russian economy relies on 40% of it coming from revenue from oil production, refining and distribution. But with oil prices at $40 per barrel 30% lower than they were a year ago (even though they’ve recovered from selling for a negative amount for a brief time), the economy is feeling the added impact of reduced production under deal the government reach with OPEC earlier this year.
Russia’s economy is expected to shrink 5 to 6% this year; by comparison, the US economy shrank 5% in the first quarter. This led to thousands of businesses, large and small, shutting down around the country.
That strained the ability of Russia’s network of charities and non-profits to assist, but the coronavirus pandemic has virtually crippled them. Vladimir Putin has promised to help families with children, pledging 10,000 rubles (about $160) per week for each child under 16, but that doesn’t cover most families’ rents and expenses.
Even with that assistance, Russia’s personal bankruptcies increased 68% in the first quarter versus the previous year. (In the US, Chapter 11 bankruptcies increased 18% the March over March 2019.)