Russia's gross domestic product is likely to grow 5.4% this year, following 4.1% growth last year, Nordea Bank, a Sweden-based financial services group operating in the Nordic and Baltic Sea regions said on Wednesday.
Russia's economy will grow 5.7% in 2012, Nordea said in a research note.
"We see the negative effects from the summer anomaly as temporary, and expect consumer confidence and spending to recover on rising real wages and a low unemployment level," Nordea said, referring to last summer's abnormal heat and drought after which Russia's agriculture shriveled over 20% in the third quarter alone.
"Inflation, having outstripped the credit and deposit rates, will help push consumers to opt for more spending. Alongside domestic consumption, fixed capital investment is now recovering fast, and will be the key growth driver...That said, the reviving domestic demand will lead to increasing imports, which are set to rebound after the large drop during the crisis, helped by a stronger rouble."
Among other economic drivers, Nordea mentioned record low interest rates, which would support domestic consumption and corporate investment activity in the coming quarters.
However, Nordea said that the Russian government was overly optimistic in expecting 6-7% inflation in 2011.
"We see risks of higher inflation, as price increases will become more broad-based, especially if oil prices remain high and capital flows to Russia resume. At the beginning of 2011 inflation will be bolstered by tariff hikes in the service sector, as well as government spending at the end of 2010. Later in the year additional inflationary pressures will also start to build on the demand side, as the output gap is set to close by the end of 2011," Nordea said.
Nordea expects the ruble to strengthen in 2011.
"We expect the rouble to continue strengthening, which is both a structural story common to growth markets, and also a medium-term trend supported by favorable global market conditions and oil prices, which we, as our baseline scenario, expect to remain above $80/bbl and move toward $110/bbl in the coming two years," it said.
MOSCOW, January 19 (RIA Novosti)
