In a Working Paper the economists of Allianz Group and Dresdner Bank argue that Russia’s impressive growth rates can no longer be ascribed solely to the oil effect. Industrial sectors unrelated to oil production are now also notching up healthy growth. The economists expect to see average annual real economic growth of 4.5 to 5.5 % up to 2010. This will be accompanied by buoyant imports, resulting in a marked drop in the current account surplus. At the same time, capital outflows from Russia will decline correspondingly.
Russia: The upswing and its genesis
With growing macroeconomic stability and a more reliable framework, foreign companies will shake off their reluctance and step up investment substantially, above all in firms geared to opening up the domestic market. This trend will be fostered by the creation of institutions and conditions less reliant on personalities. Although this institution building is now under way, it is still far from complete.