Page 18 - RusRPTNov18

However, high oil prices aren't enough to drive economic growth, which remains lacklustre, as the petro-fuelled growth model was already exhausted in 2013. Russia medium term economic outlook has growth stuck at 2% a best if no structural reforms are made. The government is trying to boost growth and Russian president Vladimir Putin has demanded higher growth rates than the global average during his last term in office that runs to 2024.
Drilling into the details net profits of Russian non-financial companies grew RUB2 trillion ($30.7bn) from January to July, RUB1 trillion ($15.3bn) of which analysts attribute to higher oil prices, according to the HSE’s Center for Development report.
The profits of extractive enterprises increased 66.4% in annual terms. Oil-producers saw profits rise 2.2 times, BMB reports. In addition to rising sales profits, fuel exporters received RUB190bn ($2.9bn) in non-operating income, in part from exchange rate differences due to the ruble’s devaluation. Overall, however, the economy lost from devaluation: companies received approximately 888bn rubles ($13.6) less before tax.
A mixed result for business confidence which fell one point in August to -3 after being steady at -2 for five months and fell again to -5 in September.. The threat of new US sanctions are weighing on sentiment as it became clear in the summer that growth this year will be slower than expected.
18 RUSSIA Country Report November 2018 www.intellinews.com