By Andrei Skvarsky.
Russia’s industry returned to its pre-pandemic output levels in the second quarter of 2021 and the country’s economy as a whole is likely to do so by the end of the year, according to the head of Russian investment boutique Matrix Capital.
Russian industry’s resumption of pre-Covid production levels is shown by “one of the classical indicators” of the state of the Russian economy, rail freight transport, namely by how much of rolling stock capacity is in use, Pavel Teplukhin, general partner at the Moscow-based firm and a prominent financier, said during an online news briefing.
Russia’s recovery is partly fuelled by “extensive ties with neighbouring China and Turkey, which are being rebuilt quickly”, he said. “Russia is a beneficiary of their growth, and [Russian] commodity sales to those countries are growing.”
Among emerging markets, the economies of Russia, China and Turkey are recovering at the fastest pace, Teplukhin said.
“Turkey was one of the countries whose economies were actually able to grow in 2020,” he said. The Turkish economy “to a considerable extent” owes its growth to “a substantial increase in lending by state banks in mid-2020.”
Among developed nations, it is Ireland, South Korea and the United States that have been showing the quickest recovery and “have practically reached their pre-pandemic levels”, Teplukhin said.
Russia’s service sector still has not regained its pre-pandemic positions, according to Teplukhin.
But it is one reason why the pandemic has been less damaging to Russia than to developed countries that service industries take up a smaller share of its economy than they do in developed nations, Teplukhin said.
Looser restrictions imposed to stop the spread of coronavirus have been another reason, he said.
Russia’s comparatively rapid recovery “may be affected by a change in the political climate, but no new wave of [U.S.] sanctions is expected at the moment due to the rational position” of the administration of President Joe Biden, Teplukhin said.
A bout of sanctions that Washington was expected to slap on Russia earlier this year never materialised, he said.
Sorry, comments are closed for this post.