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.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.

Growth roars on despite rising rouble

At the start of the year the prospect of a rapidly appreciating rouble and higher than expected inflation were seen as the biggest dangers facing Russia's economy. Both have come to pass but the economy continues to roar ahead regardless. The combination of cheap money from abroad and rising productivity has offset these dangers and is driving Russia's impressive growth.

Russia's first strong growth after a 1998 devaluation was fuelled by the cheap rouble, which lost 75% of its value against the dollar in a day. Economists worried that an appreciating rouble would kill the first green shoots of growth as the devaluation fillip was eaten away. The rouble has already clawed back 80% of the value against the dollar it lost.

Investment on the increase

 Inflation versus exchange rate
 
 Source: Aton, Goskomstat

It appears that rising competition has already led factories to invest in boosting productivity - investment that is being facilitated by the cheap money coming from abroad. The Russian economic development and trade ministry began the year with a 4.3% GDP growth estimate, but the economy put in 6.6%

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.

SUBSCRIBE ONLINE TODAY

Unlimited access to Euromoney.com and Asiamoney.com

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

FREE 7 DAY TRIAL

Unlimited access to Euromoney.com and Asiamoney.com, 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

LOGIN NOW

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