The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2022 Euromoney, a part of the Euromoney Institutional Investor PLC.

Chasing Portugal

Russia is facing its first real economic test since the fall of the Soviet Union. The strong growth of the past two years is slowing down as the last of devaluation’s beneficial effects wear off.

The Russian economy looks set to continue growing at about 3.5% to 4% over the next few years. But this is not enough to satisfy president Vladimir Putin, who said in his 1999 state-of-the-nation address that Russia needed to catch up with Portugal, western Europe's poorest nation.

"There has been a good start over the past two years but the pace needs to quicken from here," says Chris Weafer, head of research at Troika Dialog. "The economy has to move away from oil and other commodity dependency. The critical problem is that while the savings ratio is 33% there has been very little investment (other than in the oil sector) and FDI flows are dismally small. Two of the key objectives - attracting foreign capital and diversifying the economy away from oil - have not been achieved and have little prospect of a medium-term solution."

Russia needs to grow by at least 8% a year for the next 15 years if is to overtake Portugal. If it continues at the current pace Putin - and his daughters - will be dead long before the Russian economy gets anywhere close to this goal.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree