Russia: Structural reforms needed to support growth – ABN Amro

Economy outlook for the Russian country improved last year but still lacks the structural ingredients to steam a high growth environment, according to Anke Martens from ABN Amro. USD/RUB is being traded at 63.500.

Key quotes

“The Russian economy slowed down in 2019, after moderate expansion in 2018. The economy grew 1.3% year-on-year in 2019, following growth of 2.2% in 2018.” 

“As EMs outflows lessened and RUB became more stable, there was room for monetary easing and the CBR has cut its policy rate by a total of 125 bps since June 2019.”

“Lacklustre growth has been improving moderately on the back of policy support, and further fiscal stimulus is planned for the next five years.” 

“While lower oil prices are obviously negative for Russia, we do expect at least part of this effect to be temporary. In addition, the National Wealth Fund is well-equipped to cushion the blow in case of an external shock.”

“However, the economy lacks the structural ingredients for a high growth environment. The business climate remains challenging, with an overly large state role in the economy and weakness in the areas of corruption, rule of law, and regulatory quality.”


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