Expert opinions

Pessimistic outlook of Russian economy slows investment

Russia’s economy has experienced a significant slowdown in comparison to the global average which, in turn, brings serious concerns among investors who are not that eager anymore to invest in the country. However, that applies to many countries, both developing and developed, especially the United States, that followed the general trends of business in 2019.

As reported by the Russian government, GDP only grew 1.3% in 2019, which is lower than in the previous year (2.5%).

Last year, the Russian government announced its intention to accelerate the country’s economic expansion to secure an adequate positioning on the global arena. Yet so far the plan has still not turned into reality.

Many blame the slowdown in economic growth on increased government spending which was suggested by President Putin. Some see that as a throwback to the command economy of the Soviet period, with the government to spend $400 mio over the next six years. This budget, notably, will be spent on specific items.

Regardless of all speculations about the previous government’s resignation and its impact on the economy of Russia, financial experts are convinced that the new government was definitely not formed to generate new ideas but to act as a big supervisory body.

The new government’s tasks seem to focus on holding onto state power and enhancing cash flows to eventually allow rich people to grow richer.

By Natalia Revishvili,

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