Business trust for the potential of the Russian economy is high, but so are the risks
On July 10, 2024, CGI Russia, in partnership with PJSC SPB Exchange and with the support of its official partner Sber, held a roundtable for members of the Boards of Directors and company executives «The Direction for Russian Economy: Risks and Opportunities.»
The roundtable was moderated by Olga Ulyanova, Advisor, CGI Russia, and Andrey Vertiy, Head of the Sustainable Development Unit, PJSC SPB Exchange.
The speakers of the round table were Ksenia Yudaeva, Advisor to the Chairman of the Management Board, Member of the Board of Directors of the Central Bank of the Russian Federation, Sergey Shvetsov, Chairman of the Board of Directors of Moscow Exchange PJSC, Deputy Chairman of the Supervisory Board of Sberbank PJSC, Elena Myakotnikova, Director of Sustainable Development, Member of the Management Board of UC RUSAL IPJSC, Evgeny Schwartz, Independent Director of UC RUSAL IPJSC.
The participants discussed the most pressing issues of Russian economic development, including:
- GDP growth: an indicator of health or «sick man’s fever»?
- Why is it impossible to curb inflation and reduce interest rates?
- How does Russia maintain exports and ensure imports?
- Is there a solution to the problem of cross-border payments?
- Will Russia have a decent level of domestic investors?
- Tax innovations: winners and losers
- Asset seizure and investor rights
- Banks as investors and drivers of domestic consumption
- The impact of the demographic situation on the economy today and in the future
- What will happen to the ruble?
- ESG agenda as an important component of investment value
In the course of the round table, an express survey of attendees was conducted, allowing to assess the views of Russian experts and businessmen on the current and future state of economic processes in Russia. Survey results are below.
How will the Russian economy grow?
31% of respondents predict that the growth rate of the Russian economy over a five-year horizon will be lower than the global average, while 20% believe that economic growth will exceed the global average, and 17% — be at the level of the global average.
Regulator’s policy
The strict credit policy of the Bank of Russia is supported by 54% of respondents, who believe that it helps to maintain long-term investment outlook; and 22% do not support it, believing that it slows down the growth of real sectors of the economy.
The problem of cross-border payments
51% of survey participants are optimistic about the problem of cross-border payments, believing that this problem is mitigated by various situational solutions, while only 5% believe in solving the problem at the systemic level. The leading role of the banking system in solving the problem of cross-border payments is recognized by 14%, and almost twice as many respondents (31%) believe in alternative forms of payment, including digital currencies.
Factors of stock market growth by 2030
54% of respondents named the main factor that will double the capitalization of the stock market, the growth of participation of domestic individual investors (individuals). Factors such as the growth of participation of institutional investors (including NPFs) and the arrival of foreign investors from friendly countries received 42% of votes each. 14% of respondents do not believe in the possibility of doubling the capitalization of the stock market by 2030, and even fewer, only 11%, believe in the return of foreign investors from unfriendly countries.
Participation in Russian IPOs
In 2023-24, 42% of respondents invested in IPOs of Russian companies, while 22% invested in more than one company that entered the market. 40% of respondents have not invested in IPOs and do not plan to do so in the near future, and 11% are thinking about investing in IPOs before the end of 2024. 5% said they could invest, but do not see any issuers that are interesting to them.
Increase in the tax burden on individuals and legal entities
The increase in profit tax and personal income tax was assessed as fair by 26% of respondents, while 32% believe that this is fair rather with respect to individuals, but not enterprises, and 5% — fair rather with respect to enterprises than with respect to individuals. 29% of respondents considered the increase in the tax burden unfair in principle.
Climate agenda as a reason for relations
More than half of respondents (51%) believe that the climate agenda is a factor in bringing Russia closer to international partners from friendly and unfriendly countries. 34% think that our partners are too pragmatic and seek more tangible benefits from cooperation than the joint fight against global warming. 5% believed that climate cooperation is possible only with friendly countries.
