Page 26 - Russia OUTLOOK 2022

In addition much of the FDI in Russia is actually the reinvested earnings of foreign companies already working in Russia – which is not counted as FDI in many other countries.
In interviews with bne IntelliNews foreign investors already in Russia are extremely happy with their investments – one investor described Russia as a “gold mine” – and they reinvest every penny they make into expanding their Russian operations.
Moreover, the Kremlin is not very focused on FDI as the country is already awash with investment capital so attracting FDI has been less high on the government’s agenda than in many other poorer countries.
To attack more FDI would require more work on improving the business climate, legal system and property rights which are still lacking.
• Real incomes
Russia’s real wages have been stagnant or falling slowly for about six years, since the annexation of Crimea, but they returned to modest growth in the last two years.
Nominal wages have been rising faster than the rate of inflation (c8%) and as inflation starts to fall in 2022 these gains will become more noticeable that will drive more growth-fuelling consumption.
Analysts raised the forecast for nominal wage growth for 2021-2023. In 2021, growth is expected to be 9.3% (8.8% in October). In 2022, the growth rate will be 7.3% (6.8% in October), 6.2% in 2023, and 6.0% in 2024, according to the CBR’s December survey.
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