Country & Regional Focus
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Riding out the Russian winter

An interview with Sanna Kurronen, Analyst, Nordea Markets

With Russia facing a deep and prolonged recession, we look at the impact on companies in the Nordic and Baltic regions.

We spoke to Sanna Kurronen, an analyst at Nordea Markets specialising in Russia, to hear about the sudden reversal in the country’s economic outlook, and examine how geopolitical changes can have knock-on effects on country and bank risk.

Why has the Russian economy gone from strong growth to recession?

Sanna KurronenThe biggest challenge that the Russian economy faces is the price of oil, which has halved in the past year. Roughly two-thirds of Russia’s exports are in oil and gas, so it’s been hit hard by the falling prices. The Central Bank of Russia (CBR) has already predicted that GDP will decline by 4.5% in 2015. We do expect the price of oil to creep back up over the medium term, but possibly not fast enough to help turn around the economy.

Russia is also under sanctions from the EU and the US, because of the situation in Ukraine. That is affecting its ability to import goods, and the ability of its banks to raise finance.