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25 Sep, 2009 13:38

Citigroup ups outlook on Russian economy

Citigroup says expects Russian GDP to grow by 3% in 2010 according to a research note published on Friday, with CEO of Citibank, Russia and CIS Zdenek Turek adding he was not expecting a second wave of economic crises.

Revising its earlier forecast of 0.8% for next year, while reiterating its tip for a 7.5% contraction this year, the bank says oil prices stabilizing in the $60-$70/bbl range should see Russian growth settle at about the 3.5% to 4% range.

The forecast is notably more buoyant about the economic outlook than many others, noting that rebounding commodity prices have the economy ‘near stabilization’ with a rebound in demand possible from November.

Speaking with RT Business about the outlook, CEO of Citibank Russia and CIS, Zdenek Turek, said he was not expecting a secondary wave of economic crisis and that provided the global economy continued to firm, the way ahead was up for Russia.

“We don’t expect a second wave of crisis, if this is defined as a dramatic fall in the economy; fall in the currency and so on. One of the big reasons is that big crises are typically created by liquidity problems. There is, in our opinion, no particular issue with liquidity in the Russian market today. Yes, a lot still depends on the global environment – the commodity prices and the situation on the international markets overall.

But, then again, we can see gradual improvements and return of growth to many of the markets. We believe that Russian economy should be returning to growth in 2010. We are still working with our economists to revise the estimations, but we believe that we should be – depending on too many ifs and factors – probably some where around 2% minimum, and maybe better.”