Reputable research groups acknowledge that Russia’s economy has overcome the peak of the crisis and is creeping out of prolonged recession. As it often happens, investors are keen to buy undervalued assets of an ailing economy, for example an emerging market. Russia is no exception, so it is rapidly regaining popularity among investors, suggesting fat profits.
For nearly two years, Russia has been going through a losing streak amid a slump in oil prices. Being a top global oil producer and export dependent economy, its public budget shrank dramatically due to low fiscal revenues from oil exports. Moreover, the economy has to survive political and economic sanctions imposed by the US and EU. No wonder foreign investors rushed to withdraw their capital from the crisis-stricken economy. Nowadays, the economy is showing some signs of stabilization thanks to smart policy of Bank of Russia Chairwoman Elvira Nabiullina. At the bottom of the crisis, she took a crucial decision to unpeg the Russian ruble from the US dollar. Later, she insisted on a sharp increase of interest rates to combat the capital flight and knock down inflation. “The moves were painful for Russia’s economy, which went into a sharp recession as the value of the ruble slumped, reducing consumer and business purchasing power. But over time they have helped to restore some international-investor faith in a country still shadowed by its 1998 default,” The Wall Street Journal reported.
