Since Russia’s invasion of Ukraine in February, the outlook for the CIS region has collapsed.  The eastern half of the portfolio has persisted this year with strong growth potential and will again in 2023. In those markets, high commodity prices have allowed for strong budgets, underpinning heightened government spending, with a focus on social support, healthcare, education, and infrastructure. However, Russia and Belarus will see extreme declines this year, followed by sizable contractions next year, with no real potential for economic growth for the rest of the decade.

Eastern CIS markets will remain some of the most opportunistic markets globally and strong state support measures will further sustain the consistent consumer spending growth we’ve seen this year, even with heightened price sensitivity and hesitance amid accelerating inflation and uncertainty of regional conditions.

Multinationals will have to manage these high input costs and work closely with local partners to sense how much prices can be passed on, while more broadly looking to separate their CIS business from Russia, serving Ukraine and Central Asian markets potentially from elsewhere (e.g., Central Europe for Ukraine, Turkey for Central Asia).

A chart that reads "Consumer spending will be strong in 2023 in eastern CIS, resisting spillover from Russia" with the biggest decrease in 2022f in Ukraine

Key trends:

  • There is a major divergence between western and eastern CIS markets
  • Consumer spending will be strong in 2023 in eastern CIS, resisting spillover from Russia
  • Eastern CIS markets will see another boom to revenues in 2023, aiding spending further

Download an Executive Summary of the CIS Outlook for 2023

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