TRBE 2002: THE RUSSIAN MARKET

After many years of shrinking output and spiralling inflation, the Russian economy has seen a magnificent transformation. Figures quoted by the London based Evening Standard newspaper in October 2001 state that the economy has made substantive progress in the last three years alone. In 1998, the economy contracted by 4.6% and inflation was growing at 84%. In 2001, Russia is due to post growth figures of between 5.5% and 6%, with inflation pushed to new lows of 17%. Russia, alongside India and China, is expected to crown the global growth league for 2001.

The new political confidence, inspired by President, Vladimir Putin, has allowed the authorities to begin talking again about raising investment funds on the international capital markets, and this move has been welcomed by foreign investors, following the repayment of a $2.7 billion debt to the IMF in October 2001 - two years earlier than previously agreed.

Various factors have contributed to this turnaround, including a massive devaluation of the rouble, to boost export competitiveness, and a rise in commodity prices, such as oil, gas, and platinum, which amass huge revenues for the country. The surpluses created here allowed the Government to finally address the problem of public sector worker wage arrears, creating a new consumer led growth based on increased confidence.

New firms are investing in Russia with great speed - Porsche, IKEA, McDonalds are just a few of the well known brands now benefiting from this profitable market. Many other are set to follow as Russia continues its success.