RGE's Q3 2010 Russia Outlook
Positive base effects from 2009’s contraction will boost y/y growth in H1, but RGE believes that Russia will grow well below potential, by about 4.6%, in 2010 as a whole. Fuelled by an increase in real incomes, government and private consumption will be the largest contributor to growth as investment remains below trend. In fact, stronger consumption trends led RGE to revise our forecast up slightly, but we note that growth will decelerate in H2 2010 and in 2011. Russia’s underinvestment, compounding that of the past, along with worsening demographics, poses a future vulnerability, implying that potential output growth may fall if reforms are not taken.
Read the Q3 2010 Russia Outlook
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