FT Deutschland: Russian GDP driven by more than just gas and oil

Despite the common preconception that the Russian GDP is primarily driven by rising commodity prices, other economic sectors are thriving and prove to be increasingly attractive for foreign investors, the Financial Times Deutschland argued in a piece published on May 5.

The article took a close look at the latest developments in the Russian economy and stock markets contributing to Russian GDP. Douglas Helfer, fund manager at HSBC Asset Management, says the Russian government’s recovery program and the Central Bank’s favorable rate cuts policy have allowed economic sectors which face difficulties in other countries, such as the food retail sector, to experience high growth.

Indeed, a recent Renaissance Capital report said that retail sale growth may accelerate to 14 precent this year, according to Bloomberg. The investment bank also raised its price forecasts for Russia’s two largest food retailers, X5 Retail Group and Magnit, by 21 percent and 25 percent respectively.

Postive for Russian GDP, such sectors are particularly attractive for investors, the Financial Time Deutschland says, helping to explain the good shape of the RTS, Russia’s main stock exchange, which increased by 80 percent over the past 12 months and should continue to rise, according to a VTB Capital forecast.