A survey of German companies operating in Russia showed that they expect the country’s economic situation to improve in the second half of 2021. This is the opinion of more than half of those polled in the study by the Russian-German Chamber of Commerce. . Only 12% think that the changes will be negative or rather negative.
Almost half of German companies plan to invest several billion euros in the country over the next 12 months. In addition, many are ready to increase the number of their employees in Russia.
This study was conducted in May and June 2021 among a thousand member companies of the chamber. Its authors note that this year’s survey results have been the most positive in recent years. In total, there are about four thousand German companies operating in Russia.
The first quarter of 2021 was still showing minus, but a 0.7% drop is already better than preliminary estimates from Bloomberg’s consensus forecast, where minus 1% was expected. The recovery of the Russian economy has so far been ahead of market expectations.
The European Commission announced in mid-May that it expects the Russian economy to grow by 2.7% in the second half of the year. At the end of June, Russian GDP forecasts appear even more optimistic.
Russia learned to deal with the pandemic without shutting down business and isolating citizens, which cannot be said of other countries where there were many more lockdowns, and they were tougher than in Russia.
It is precisely the flexible approach to the pandemic that, in all likelihood, is now the key factor in the attractiveness of the local economy for German investors. They are confident that Russian companies will withstand the third and fourth waves of any viral strain.
Risks to the recovery of the Russian economy include the trade war between America and China, as well as a sharp rate hike in the United States.
Finally, the risks of sanctions have nowhere disappeared, and it is no longer entirely clear when they will disappear. Sanctions are perhaps the main risk factor: in the first half of the year the measures were very light and local, they did not affect economic processes, and therefore the ruble did not react to this news as strongly as expected. .
If Russian banks nevertheless disconnect from SWIFT, prohibit the purchase of Russian shares not only during the initial placement of OFZs, but also in the secondary market, then it will be much more difficult to recover from positive scenarios.
In this case, the attractiveness for investment of Russian stocks will decrease and the ruble will weaken.
As for “reverse investing”, the situation is as follows. In the first quarter of 2021, private investors in Russia sharply increased their investments in foreign stocks. They increased from 220 billion rubles to 836 billion. At the same time, over the whole of last year, the Russians invested 346 billion rubles in the shares of non-resident companies.
In addition, the St. Petersburg Stock Exchange, Russia’s largest international stock trading platform, plans to create new indices for stocks of foreign companies.
