According to John Litwack, Russia’s Chief Economist, GDP is expected to grow by over 7% this year (2007), considerably above the govt.’s forecasted 6.5%, as reported by financialexpress.com on June 13, 2007.
"Russian investment growth has mushroomed into a genuine boom in early 2007," said the report, predicting that the current growth boom would break year 2000’s record of 17.4%. The capital investment grew 19.9% over the first four months (from January to April) of the year in comparison to corresponding period last year (2006).
Metallurgy and commodities sectors are Russia’s most lucrative sectors, with the thriving domestic market that has shown rapid growth owing to the increasing purchasing power, said World Bank in its report.
Investors are drawn towards the markets where they see a strengthening currency, Ruble in this case, and where they can earn relatively stronger margins. Foreign investment reached a record US$ 9.8 Billion in the 1Q of 2007, and around US$ 7.7 Billion of this investment went in industrial minerals. FDI (Foreign Direct Investment) remained just US$ 3.8 Billion in the 1Q of 2006. Unemployment, a chronic issue, is another problem in the economy of Russia figured out by the Bank experts.
According to RNCOS report “Russian Retail Sector Analysis (2007-2011)”, “Russian economy has been growing at an impressive pace over the past six years (period between 2001 and 2006). In spite of a minor lag during 2005-06, economic growth during the recent years has remained generally on an upswing. Ongoing strengthening of the currency (Ruble), and stable growth in personal incomes are expected to help expand the retail market’s size to US$ 744.92 Billion by the year 2011.
Key issues and facts analyzed in this report include: market size and scope of the organized retail in Russia, factors driving growth in this sector, size of organized market segment wise & its growth prospects, opportunities & challenges faced by retailers in Russia, and so on.
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