Russia Country Risk Report

Providing comprehensive data and in-depth analysis of political, financial and economic risk.

Report includes: BMI's Core Views, 10-year Forecasts, BMI's Economic Risk Index, Political Stability and Risk Index, Long-term Political Outlook, Operational Risk Index, SWOT Analysis and Structural Economic Sections

Why you should buy this report

  • Understand and measure the political, business environment and operational risks to your company
  • Gain insight on emerging trends that could support, strengthen or disrupt your activities in the market
  • Benefit from 10-year macroeconomic forecasts and insight into the structural characteristics of the economy
  • Get the long-term political outlook and explore possible scenarios for change
×

Sign up to download the Russia Country Risk Report

By submitting this form you are acknowledging that you have read and understood our Privacy Policy.

Thank you for your interest

You will shortly receive your free executive summary by email.

Russia Country Risk Report
Product Price
$1,195.00

Core Views

  • President Vladimir Putin's popularity remains near record highs, although we expect this to moderate as economic hardship continues to to be realised by the general public. Despite the deterioration in living standards, we do not expect any mass uprising in response to the deteriorating economy.

  • Persistently low oil prices, fiscal austerity, weak investment growth and declining real incomes will lead to second consecutive real GDP contraction of 0.7% in 2016, followed by only a modest recovery to 1.5% growth in 2017.

  • Russia's long-term growth potential is subdued, closer to that of mature developed economies rather than a higher growth emerging market. This is due to the highly centralised nature of the economic model and large government footprint in key sectors, reliance on energy exports, poor business environment, weak investment growth and lack of structural reform momentum.

  • Russia's external position will remain a bright spot for the economy despite a fall in the price of its main commodity exports, with the current account surplus remaining in relatively robust surplus in the coming years as imports remain subdued. Over the coming quarters we expect little financing pressure to emerge in the economy as its large international reserves position remains sufficient to entirely cover maturing external obligations during 2016/2017.

  • While Russia's fiscal position is bolstered by very low public debt ratios and fiscal reserves at its disposal, the sovereign profile will deteriorate in the coming years and major fiscal reforms - such as an overhaul of the pension system - will be necessary to ensure long-term sustainability of the public finances in light of lower commodity prices.

Major Forecast Changes

  • We maintain our real GDP growth forecast for 2016 at 0.5%. Although we have downgraded our forecast for 2017 from 2.3% to 1.5% y-o-y as lower oil prices will prolong a recovery in the Russian economy.

  • With inflation proving sticky and oil price declines keeping depreciatory pressure on the rouble , we now expect monetary easing to proceed at a slower pace. We have revised up our end-2016 forecast to 9.00%, from 7.00% previously.

  • With oil price declines at the start of 2016 rendering the government's budget assumptions unrealistic, we have increased our budget deficit forecast from 2.8% to 4.0% of GDP in 2016.

Key Risks

There is virtually no risk of a sovereign credit event occurring in Russia due to high FX reserves and low debt ratios. That said, growth drivers will be elusive in the absence of much higher oil prices or a significant ramp up in structural reform momentum, neither of which looks probable in the coming years. Instead, risks are tilted towards a weaker growth than we currently are forecasting, given the potential for oil prices to undershoot our already below consensus forecasts.

Macroeconomic Forecasts (Russia 2014-2017)
Indicator 2014 2015e 2016f 2017f
National Sources/BMI
Real GDP growth, % y-o-y 0.6 -3.7 -0.7 1.5
Nominal GDP, USDbn 1,850.7 1,335.6 1,136.8 1,294.6
Consumer price inflation, % y-o-y, eop 11.4 12.9 8.5 5.5
Exchange rate RUB/USD, eop 60.74 72.85 70.00 73.50
Budget balance, % of GDP -0.5 -2.7 -4.0 -3.4
Current account balance, % of GDP 3.2 4.9 4.3 3.6
Executive Summary
5
Core Views
5
Major Forecast Changes
5
Chapter 1: Political Outlook
7
SWOT Analysis
7
BMI Political Risk Index
7
Domestic Politics I
8
NGO Crackdown Underscores Kremlin's Stability Concerns
8
TABLE: POLITICAL OVERVIEW
8
Domestic Politics II
9
Five Scenarios For A Post-Putin Transition
9
Foreign Policy
14
Four Conflict-Related Risks For Kiev And Moscow
14
Long-Term Political Outlook
16
Putin Facing Far Greater Challenges Over 2015-2024
16
Chapter 2: Economic Outlook
21
SWOT Analysis
21
BMI Economic Risk Index
21
Economic Activity I
22
Fixed Investment Resilient While Consumption Plunges
22
TABLE: PRIVATE CONSUMPTION FORECASTS
22
TABLE: GOVERNMENT CONSUMPTION FORECASTS
22
TABLE: FIXED CAPITAL FORMATION FORECASTS
23
TABLE: NET EXPORTS FORECASTS
23
Fiscal Policy
25
Cutbacks Increasingly Necessary As Reserve Depletion Continues
25
TABLE: Fiscal Policy
25
TABLE: Selected Regional Debt Profiles
26
Monetary Policy
28
Inflation Risks Abound But Easing To Continue
28
TABLE: Monetary Policy
28
TABLE: Monetary Policy
29
Exchange Rate Policy
30
Further Depreciation Ahead In 2016
30
TABLE: BMI RUSSIA CURRENCY FORECAST
30
Balance Of Payments
32
External Position Sustainable
32
Russia's current account surplus will expand in 2015 due to a drastic fall in imports
In addition to this, the free-floating rouble, a positive
and rising net international investment position and a commitment to rebuilding reserves will contribute to external position stability over
and rising net international investment position and a commitment to rebuilding reserves will contribute to external position stability over
the coming years
TABLE: Current Account
32
Chapter 3: 10-Year Forecast
35
The Russian Economy To 2024
35
Structural Deficiencies Weighing On Growth
35
TABLE: Long -Term Macroeconomic Forecasts
35
Chapter 4: Operational Risk
37
SWOT Analysis
37
Operational Risk Index
37
Operational Risk
38
TABLE: Operational Risk
38
Market Size And Utilities
39
TABLE: Emerging Europe - Market Size And Utilities Risks
40
International Security Risk
43
TABLE: Emerging Europe - Interstate Security Risks
44
Chapter 5: Key Sectors
47
Pharmaceuticals & Healthcare
47
TABLE: Pharmaceutical Sales , Historical Data And Forecasts
48
TABLE: Healthcare Expenditure Trends , Historical Data And Forecasts
49
Telecommunications
51
TABLE: Telecoms Sector - Historical Data & Forecasts
52
Other Key Sectors
54
Table : Autos Sector Key Indicators
54
Table : Food & Drink Sector Key Indicators
54
Table : Infrastructure Sector Key Indicators
54
Table : Oil & Gas Sector Key Indicators
55
Table : Defence & Security Sector Key Indicators
55
Table : Freight sector Key Indicators
55
Chapter 6: BMI Global Macro Outlook
57
Global Outlook
57
Assessing The Aftermath Of Three Key Events
57
Table : Global Assumptions
57
Table : Developed States , Real GDP Growt H, %
58
Table : BMI VERSUS BLOOMBERG CONSENSUS REAL GDP GROWTH FORECASTS, %
58
Table : Emerging Markets , Real GDP Growth , %
59

Assess your risk exposure in Russia with our 100% independent forecasts assessing the pace and stability of this key market. Backed by trusted data from BMI Research's 52 million data point economic forecast model, this report will allow you to measure political, economic, business environment and operational risks in Russia with confidence.

Your subscription service includes:

  • Delivery of the report in print, PDF and online formats
  • The functionality to translate your online report into your choice of 10 languages - Arabic, Chinese, French, German, Italian, Japanese, Korean, Portuguese, Russian and Spanish
  • The ability to export data and graphs from the online report directly into your workflow
  • The support of a dedicated Account Manager to answer any questions you might have about your subscription
  • Access to our team of leading analysts who will be happy to answer any questions you might have about the data and forecasts included in this report