The Russian government’s declared better-than-western exit from the pandemic crisis has been confirmed by Western European experts, with German and French companies planning to increase their investment in the Russian economy in the next 12 months
As Olga Samofalova writes in her article for the Vzglyad newspaper, a survey of German companies operating in Russia showed that they expect the economic situation in Russia to improve in the second half of 2021. That is the opinion of more than half of those polled in a survey by the Russian-German Chamber of Commerce (WCC).
Nearly half of them are ready to continue investing in the Russian economy (and we are talking about investments of billions of euros), as well as creating new jobs by increasing the number of employees in their offices in Russia.
This is not surprising because the economic decline in Russia during the pandemic has been much better than expected (0.7% of GDP instead of 1%). It is only natural now to expect an accelerated recovery in the economic indicators, which, alas, other global players cannot boast of.
“We expect annual growth of around 4%, a budget deficit in the range of 1.5% of GDP or even less with a weak ruble and expensive oil – the price per barrel in rubles is at historic peaks. Investment in the economy will rise. We see the dollar falling below 70 rubles by the end of the year”, – says Anton Tabakh, managing director for macroeconomic analysis and forecasting at the Expert RA agency.
The head of macroeconomic analysis at Finam Group Olga Belenkaya echoes his sentiments.
“Our forecast for the Russian economy growth in 2021 was 2,8-3%, now we see higher growth, in the region of 3,3-3,6%, but taking into account new risks, it is possible that it will have to be lowered”, – the expert says.
According to the analysts, the global environment, in particular oil prices, which soared to $75 per barrel for the first time since 2018, is also playing a positive role for the Russian economy.
“High oil prices and the current budget surplus give every reason to expect a full economic recovery by the end of the year. Increased demand and lagging supply on global markets could be a good incentive to make a breakthrough for the Russian economy”, – says Tatiana Skryl, associate professor of economic theory at Plekhanov Russian University of Economics.
Another important lever of positive influence on the situation the experts call actions of the Russian government, which stimulates consumer demand in the market by targeting cash assistance to Russian citizens. All the more so, since the current significant surplus in the state budget allows for this.
And while in recent years agriculture was the main sector that managed to perform well during the difficult conditions of the crisis, in 2021 the Russian industry is already recovering, and the biggest driver of growth of the domestic economy will be the growth of consumer demand.
“The faster public places (restaurants, entertainment centres and others), as well as private companies, adjust to the ‘perpetual pandemic’, the faster the Russian economy will recover”, – says Alexander Kuptsikevich, lead analyst at FxPro.
Well, probably the main argument in favour of the Russian economy is the fact that Russia has learned to cope with the pandemic without stopping business and isolating citizens, which is not the case in other countries, where there have been far more lockdowns and they have been much tougher.
“A flexible approach to the pandemic is likely to be a key factor in attracting German investors to the local economy now. They are convinced that Russian business can withstand both the third and the fourth wave of any virus strain”, – believes Kuptsikevich.