Morgan Stanley: weak investment main cause of Russian slowdown

By Andrei Skvarsky.

Morgan Stanley believes poor investment is the main cause of Russia’s decelerating economic growth.

{{{?}}}

Weak investment has been more powerful as a growth decelerator than robust global oil prices have been as an accelerator, the bulge bracket bank’s chief economist for Russia, Jacob Nell, argued at a briefing in Moscow last week.

But Morgan Stanley expects some increase in investment next year, though 2013 has shown a string of “disappointments”, making the Wall Street firm revise its growth forecast for the year to 1.6% from 2.2%, Nell said.

Hence the Russian economy will pick up somewhat in 2014, the bank thinks, though it has still downgraded its growth forecast for that year to 2.7% from 3.1%.

One hindrance to growth in Russia is the government’s foot-dragging on structural reforms, according to Morgan Stanley. Another is the apparently increasing role of the state in the economy, one example being the large-scale acquisition of private energy companies by state-owned firms, the firm argues.

(Visited 24 times, 1 visits today)

Sorry, comments are closed for this post.