Russia’s business landscape is dominated by the now-familiar burden of sanctions, but geopolitical issues are not stopping the country’s exporters from broadening their horizons.
After several years of hostility from the West, Russia is now pivoting to a new, fast-growing trading partner in the east that is more than happy to do business – China.
China now accounts for 16% of Russia’s global trade, and this figure is expected to rise, with Chinese consumer goods being exchanged for Russian hydro-carbons and manufacturing know-how.
Domestically, investment into Russia is lagging and monetary policy remains tight to counter FX volatility, which is strongly linked to portfolio flows.
Oil and gas production are still the cornerstone of the Russian economy but a drop-off in global consumption, alongside geopolitical challenges, means the government may have to alter its financial strategy to maintain its support of Russian energy suppliers.
Russia is also looking to promote investment from foreign companies, primarily in large infrastructure projects, which are currently being propped up by public funding, explains ING’s chief economist for Russia, Dmitry Dolgin. Reporting from GTR Russia 2019 in Moscow, Drew Nicol speaks to Dolgin about how Russia’s economic and trading environment is evolving in a global context.