Russia's economic trends bode well for foreign investors
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Russia's economic trends bode well for foreign investors

Troika Dialog has revealed a positive set of data that show domestic demand remains the main economic-growth driver, while import levels continue to grow

Troika Dialog, the Commonwealth of Independent States' oldest and largest private investment bank, has revealed in a report that:

Domestic demand [in Russia] remains the main economic-growth driver.

Retail sales expanded 6.8% year-on-year in January, while investment increased 15.6% year-on-year, a rapid acceleration from the 6.2% rise seen in 2011.

This acceleration appears to be more statistical in nature than based on economics. We believe the official figures understated investment activity in 1H11, so the double-digit year-on-year growth in January can be regarded as merely a result of the understated base.

Furthermore, import data in Troika Dialog's report should bode well for countries such as Turkey, which are actively targeting Russia for export growth.


Russia, like most emerging markets, has become a beacon for growth.

In 2000, the share of Turkey's total exports for the largest 10 export destinations, including the USA and Germany, was 62.4%; by 2011 it had fallen to 49.6%. While Europe remains an important trading partner for Turkey, other countries’ stature has increased.

Experts recently told Euromoney in Turkey that the country is targeting Iraq, the UAE and Russia for export growth. 

However, Troika Dialog warns that investor sentiment and the large increase on imports and exports may be "temporary":

Investor sentiment seems to have become more positive at the beginning of the year. Emerging markets
[including Russia] have once again been deemed attractive, though we do not exclude the possibility that
this is temporary.

Overall, the equity and debt markets posted growth in Russia, while the rouble
appreciated. In addition, the oil price increased in January-February, contributing to an increased trade

Nevertheless, in net terms, Russia remains the world’s creditor. We expect net capital outflow
this year at around $50-60 billion, though this is lower than the almost $85 billion seen last year.

For more on how Turkey is targeting Russia and other countries for export growth, and an in-depth feature on Turkey, don’t forget to check out the March edition of Euromoney magazine.

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