The Russian economy is seeing a broad recovery both regionally and by industry. The mild, easing restrictions have led to a revival in economic confidence, which allows core districts of European Russia to recover quickly. We see several economic trends in Russia’s regions through 2021.
- The core Central, Northwest, and Southern Districts suffered initially on account of their large service sectors; however, they have also recovered more swiftly, as the domestic economy reopens, and unemployment and incomes were more resilient throughout 2020.
- The Urals, Volga, and Siberia Districts have struggled since the second half of 2020, though the outlook is improving as domestic and global demand pick up. This will likely increase employment and incomes in the coming months.
Firms should ensure local partners are prepared for an uptick in demand across regions and industries, as well as to potentially reacquire old customers.
Public spending continues to grow, but a precarious recovery in regional revenues is a source of risks
Regions saw a considerable deterioration of their financial health in 2020, with 58 regions seeing a deficit at the end of the year. Top-performing regions have remained relatively resilient and retained their credit ratings, while regions that are reliant on energy and mining productions saw a much more significant impact on their finances. However, a notable recovery in oil prices in 2021 should improve their fiscal situations. Regions that rely on manufacturing, agriculture, or have diversified economies have been more resilient and will likely continue to outperform as the recovery gathers pace.
Our full report on Economic Trends in Russia’s Regions dives into B2B, B2C, and B2G trends to prepare your business for broad-based growth across Russia, with specific industry assessments. Download our free mobile app to learn what is happening beyond market trends, stay ahead of reimbursement environments and enhance your performance in must-win markets. Available on iOS and Android. To receive access to our full suite research, data, and events on your critical markets in Latin America, start your free trial of FrontierView today.