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29 Aug, 2007 06:57

Russians more optimistic about economic future: report

Russia's top insurer Rosgosstrakh has measured the extent of optimism with its Consumer Confidence Index, which gives an idea of whether people feel like spending money, and it seems Russians are becoming more optimistic about their economic future.

Nine years after the Russia's 1998 economic crisis, pessimism about the country's economic future is becoming a thing of the past.

Seven years of steady economic growth, rising incomes and declining poverty are underpinning renewed optimism.

The Consumer Confidence Index, or CCI, measures the difference between the number of optimists and pessimists – with optimists gaining the upper hand.

The survey reflects the opinions of almost 14,000 respondents across Russia and shows that this year the index now stands at 132 points – up 11 points on 2006 – and well above 2005's 115 points.

Those conducting the research say the CCI is extremely important for the further development of national business.
“We see this index as a mechanism which will push Russian businesses and enterprises forward. We hope that those indexes will inevitably lead to the growth of the Russian economy at large,” states Andrey Burykov, the Head of Rosgosstrakh's PR Unit .

This is a particularly helpful insight when there are questions about which issues remain to be addressed for Russia to sustain its economic performance

“One is diversification – finding the areas where Russia can develop comparative advantage outside the resource industry; the demographic crisis, migration, adequate labour supplies, problems in regional development,” John Litwack, Head Economist of the World Bank in Moscow, points out.

For the time being the CCI is not as strong an indicator for the Russian economy as it is in the U.S., where its decline directly influences the stock markets.

Things will change though as consumer consumption becomes an even bigger economic driver and the country becomes less reliant on exports of raw materials. But if the survey is right, it seems that the Russian public thinks this won't be too far away.