Russian growth stymied by a crisis of confidence

Russia’s economy is doing fairly well but what is holding it back from faster growth is a crisis of confidence amongst its businessmen: corruption and red tape are problems, but it is the increasingly predatory nature of the state-owned enterprises that make some businessmen wary of taking the kind of risks needed to fuel faster growth. The default attitude is to make certain of your existing business and not stick your head above the parapet.

The Rosstat Business Confidence survey shows an aggregate improvement over the last two years as the economic recovery gets underway. The index has risen from a low of -5 index points in December 2017 to -2 in March where it has remained since then. The index averaged -3.23 from 2005 until 2018, reaching an all time high of 7 index points in the midst of the boom years in July 2007, but then fell to a record low of -20 in December 2008 during the global crash.(Read more…)