Foreign Investment into the Russian Market Is Growing

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Foreign Investment into the Russian Market Is Growing

Originally appeared at A-specto, translated by Borislav exclusively for SouthFront

The inflow of investments to the Russian market has increased from 37 million to 65 million dollars in a week. The research center “Sberbank Investment Research” reported that both actively managed and passively managed funds have increased their revenue from the infusion of foreign capital last week. Accordingly, they have added 31.4 million dollars and 33.4 million dollars to its assets. Analyses show that the rise in oil prices is behind the increase of investor interest in Russia. On last weeks Friday, the price of a barrel of oil topped $ 46 for the first time since the end of July.

Only two weeks earlier, the registered outflow of capital amounted to 32 million dollars. Experts have linked it with investor concerns about the fluctuations of the ruble. At the same time, global funds which are invested in emerging markets, have secured a growth of 80.3 million dollars at the capital market.

Meanwhile, the Russian economy is beginning to show signs of recovery. Gross domestic product shrank by 0.6% in the second quarter, according to the Federal State Statistics Service of Russia (Rosstat). This is an improvement compared to the first quarter when the decrease amounted to 1.2%. According to the Russian Economic Development Minister, Alexey Ulyukayev, this is a symptom that the economy will improve in the near future. The reason for this is that the situation in the real sector is improving, and the dynamics of industrial production is moving in a positive direction. Estimates are that by the end of the third quarter, Russia’s GDP will shrink by 0.2 percent. It is also expected that by the end of the year there will be a growth of 1.2% if the average price of oil is around $ 40 a barrel.

Russia’s Ministry of Finance does not exclude the possibility that the Russian economy will grow, if the international economic environment remains favorable. According to some economists, Russia is about to emerge from its longest recession in 20 years. While it is dependent on oil exports, the country hopes to diversify its economy by developing its agriculture – a sector that has shown steady growth over the past two years. Russia has become the largest exporter of wheat in the world, overtaking the US and Canada. Its objective for this year, is to sell 25 million tons of wheat abroad.

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  • Joseph Scott

    Good. A strong Russia makes the globalists wince.

  • sepheronx

    I am more interested to find out what Stolychin group comes up with and if it will be chosen as the path for economic development for Russia. The previous economic policy from Kudrin was a failure – reliance on foreign money to develop Russia is a joke and makes Russia more reliant on outside forces for its economic development than anything else. It was these tough times in last couple of years that forced Russia to import substitution and development of industries in Russia that truly made Russia less dependent on oil/gas prices.

    Development of Russia’s future needs to happen from within. Make the community far more involved in local investments/funding as well as more interested in business. The state should then hold more open competitions for contracts for local participants only, rather than already selecting state run agencies. The idea of making SME’s far more important in state run organizations procurement is ideal and will bring overall more money and a diverse economy. SME’s is Russia’s future, and does not need foreign funding.

    To note, Germen Gref of Sberbank is a fifth columnist and isn’t for the state of Russia. For some reason, he keeps his position at Russia’s most powerful bank, but I figure his time is coming to an end eventually. So I take what they say with a grain of salt.