Light beckons from depths of financial crisis
The credit crisis has not spared Russia, with its vast reserves and its once-massive windfall fund. But as severe as the current financial mess may seem, it will come to an end and experts are beginning to see light at the end of the tunnel.
Recession, depression, depreciation and deflation – these are just a few scary terms that accompany global economy as it goes haywire. But some, including Finance Minister Alexei Kudrin, are beginning to see the light at the end of the tunnel.
“The situation has normalized. People don’t seem to be as worried, so banks can slowly return to business as usual. They can finally focus on lending to the real economy. Within a few months, or perhaps even sooner, Russian banks, and State owned banks in particular, will boost their lending programs.”
According to Erik Berglof, Chief Economist for the European Bank for Reconstruction and Development, the recovery signs are easy to spot.
“We need to wait for the United States to pick up for this region to really have a chance to also turn around in a serious way in terms of growth, and so the most optimistic forecast now are talking about late 2009.”
There is no sure way to tell when the global economy hits the bottom. But US economist Nouriel Roubini – who saw the crisis coming in 2006 – said Russia's path to recovering may be shorter than for its Western counterparts.
“How fast Russia’s going to recover is going to depend on the set of financial policies and fiscal policies. It will still be a rough year, 2009, but policy responses are going to help to get you [Russia] out of it faster.”
As the world nears the end of a total and indiscriminate mistrust in the market, it can count of having stronger banking systems and better regulated financial markets.