American financial expert James Rickard made the analysis of the Russian economy and came to the conclusion that soon the country will become attractive for investment.
According to the American expert on Finance Ricarda James, Russia is already ready to get out of the “oil slump” and become one of the most successful States emerging attractive investment market in the coming years. He calls the country a “sleeping giant” who broke the dependence on oil prices, and now it covers diversified growth.
About that James wrote in an article in the online edition of the Daily Reckoning.
The expert notes that the Russian economy is the 12th largest in the world ranking with an estimated $1.3 trillion in GDP. It’s a little more than Australia or Spain, and much larger than the popular emerging markets. For example, Mexico, Indonesia and Taiwan.
Rikard draws attention to the fact that Russia’s debt to GDP is only 17%, while the US debt-to-GDP ratio equal to 106% (which is about 6 times more). The other “zombie debt to GDP” it took Japan (240%), France (96%) and the UK (89%).
With all these indicators, the most important event for the Russian economy, the expert considers diversification as it allows you to avoid exclusive dependence on exports of energy.
“Russia has increased its export economy. This export includes the sale of arms to such countries as Iran and Turkey”, — said the economist.
In addition, Russia is a major exporter of the technology for nuclear power plants. For example, Moscow has recently signed several large deals with Turkey related to expanding its nuclear power industry.
The expert notes that Russia is the largest exporter of the grain. Products of this type will be in high demand because of drought in the countries-competitors —Australia, Canada and the United States.
Improved positive trade balance and the Russian reserves will make the country a magnet for foreign direct investment and flows of global capital.
James concludes that, contrary to the expectations of most Western analysts, the combination of a diversified export earnings and efficient management of the reserves of the Central Bank has made Russia less vulnerable to economic sanctions and oil prices.
“Surviving a storm, the Russian Federation will be the main beneficiary, as sanctions gradually weakened and oil prices gradually recovered,” — said the economist.
Author: Ilya Alexandrov