Russia’s economy continues to improve, with the first positive rating issued since sanctions were imposed on the country in early 2014.
International rating agency Standard & Poor’s (S&P) raised the outlook for Russia’s sovereign rating to “positive” up from stable on Friday March 17.
This is the second time in a month that an international agency has given Russia improved ratings.
Earlier, Moody’s changed its outlook on Russia’s sovereign rating to stable and confirmed Russia’s government bond rating and issuer rating at Ba1.
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Maxim Oreshkin, the Minister for Economic Development, said, “previously, we met with S&P analysts, we told them about our plans, the current economic dynamics, the government’s forecasts and actions aimed at preparing a plan to increase the economy’s growth rate, which affected their expectations and helped to make a decision about a positive outlook earlier than we expected”.
The renewed confidence in Russia comes at a time when the country has embarked on a specific campaign to lessen exposure to the EU, to invest more in domestic production and to engage more with Asia.
Ironically, the Russian economy is now growing at a faster pace than the EU.
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“The sanctions were badly thought out,” says Chris Devonshire-Ellis of Dezan Shira & Associates.
Further, Devonshire-Ellis noted, “the EU turned away an important market, cost European businesses supplying Russia billions of dollars, and encouraged the Russians to look east. For many small European businesses, the Russian market is never going to come back. The EU’s loss though is Asia’s gain”.