According to a report by Allianz Dresdner Economic Research the private sector is expanding strongly and domestic financial intermediation is showing clear signs of picking up again for the first time since the 1998 crisis. This fuels hope that the country is increasingly using its immense revenues from oil and gas exports to modernize and expand its battered capital stock. Steep rises in investment and imports point in the same direction.
Russia: More than oil and gas
According to the Allianz-Dresdner economists Russia’s boom is set to continue in the coming years. Arguing in favor of ongoing buoyant growth is the fact that the boom, which has so far been confined to just a few cities, will increasingly spread to other parts of the country. We will also see further productivity gains in the economic centers, probably also a reflection of more modern production plant in the manufacturing sector. All told, the economists expect to see average annual real growth of 5.5-6 % over the medium term.