Despite continued economic sanctions towards Russia, the results for the 4th quarter were strong and the year came in at close to +10%. We saw strong industry numbers during the quarter with a reading of 52 (above 50 is positive) and reserves at over $432 bn.

After the election of the US President, the typical idea of many investment banks was a possibility of softening of anti-Russian sanctions. Unfortunately, it quickly became clear that these hopes would not come true.

In the US Congress, the sanction initiatives began to multiply, culminating in the law on new sanctions against Russia signed by the US President in August. However, despite all possible and existing sanctions, the Russian economy came out of a recession in 2017 and is showing a growth of approximately 2%.

Moreover, inflation fell to a post-Soviet low of 2.5%. While this figure is preliminary and might be revised, the fact is inflationary pressure was low throughout the year. This is a positive sign for the Russian economy, as low inflation gives room for monetary easing which in turn should make credits more accessible for local businesses. In 2017 the Russian Central Bank decreased its key rate 6x from 10% to 7.75%. Russia also has a very small debt burden of approximately 10% of GDP.