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Russia overview

Cityscape in Russia

The Bank has made no new investments in Russia since 2014. In April 2022, the EBRD’s Board of Governors decided to suspend access to the Bank’s resources by Russia, in response to the invasion of Ukraine. The Bank has closed its office in Moscow. Russia continues to be a shareholder of the Bank

Prior to the suspension of access to resources, we focussed on:

Diversifying the economy: private enterprises and private financial institutions that support non-resource sector growth are key for diversification. About 90 per cent of EBRD investments in Russia in 2013 were in the private sector.

Investing in and setting standards for modernisation and innovation: focus is needed on enterprises that innovate, introduce modern new technologies, or upgrade to international standards, particularly with regard to corporate governance, transparency, energy efficiency, inclusion and gender issues. Improving energy efficiency is a key aspect of modernisation across various sectors of the economy.

Supporting privatisation and private sector development: the role of the private sector in the economy needs to increase through strengthening existing private operators; increasing the MSME share in the economy; pursuing transparent and competitive majority privatisation strategies for state-owned companies; conducting policy dialogue on privatisation; and promoting PPPs as a tool to attract more private sector investment into state-dominated sectors.              

Increasing economic opportunities in Russian regions: Russia is a federal state whose component regions vary widely in terms of per capita income, unemployment and investment. To promote regional development, it is necessary to support projects and reforms that advance transition in regions that are less advanced than Moscow and St. Petersburg and that are committed to improving the investment climate.

As well as being a country where the EBRD works, Russia is also an EBRD donor. In 2013 the Russian government established its first bilateral Technical Cooperation fund with a contribution of €40 million over five years in support of the EBRD’s core operations in the country. Funding is focused on the development of projects in transport and infrastructure, energy efficiency, agribusiness and SMEs. Russia also remains the biggest donor to the NDEP environmental window with total contributions totalling €60 million.

The EBRD’s latest Russia strategy was adopted on 18 December 2012

Current EBRD forecast for Russia’s Real GDP Growth in 2023: -1.5%

Current EBRD forecast for Russia’s Real GDP Growth in 2024: 1.0%

Russia’s economy contracted by 2.1 per cent in 2022, less than initially expected, as high energy prices partially mitigated the impact of widespread sanctions. However, lower energy prices and EU-imposed price caps on Russian oil and oil-derived products since December 2022 have negatively affected exports and government revenues. Weak consumer demand and a tight monetary policy have contained an initial rise in inflation, which, owing also to base effects, fell below pre-invasion levels in March 2023.

However, the rouble has weakened by over 10 per cent against the dollar since the start of 2023, driven by lower foreign exchange revenues and sales of foreign-owned businesses, and this depreciation will contribute to inflation in the coming months. The economy is expected to contract again in 2023, by 1.5 per cent, reflecting the impact of the new sanctions. This nonetheless constitutes an upward revision relative to the forecasts made in February, driven by higher oil price expectations and redirection of oil trade to alternative destinations. A return to growth, forecast at 1.0 per cent, is expected for 2024, although this is dependent on how the war on Ukraine and the related economic sanctions will evolve.

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