Russia: Once again “the worst is over”

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Russia: Once again “the worst is over”

The Russian economy has responded positively to Boris Yeltsin’s retirement and to a commodity boom. Can the bullish mood last or will reform get bogged down and Vladimir Putin’s “strong government” put a straitjacket on enterprise? And does finance minister Mikhail Kasyanov have the breadth of experience to control the economy? We also look at Alfa, the only Russian bank to come out of the crisis stronger than it went in.

There's good news from Russia. The economy is growing, albeit from a low base, and with high world commodity prices, public Finances haven't looked this good for years. With a young healthy president just shooed into office, leading companies are cleaning up their act and the Kremlin has said - for the umpteenth time - "the worst is over". Russia restructures: but is anyone going to believe it this time round?


Following Boris Yeltsin's resignation, things could only get better. The business community has taken heart at the prospect of a new president, Vladimir Putin, who won't fall over every time he appears in public. Immediately after Yeltsin's resignation the leading RTS (Russian Trading System) stock index jumped some 60% and grew from 170 in January to around 224 in mid-March. Analysts are expecting it to climb again to between 300 and 500 by the end of this year.


Goodwill in the stock market since Christmas has been backed by strong results in the economy over the First quarter. Industry has boomed, with production up 8.1% in 1999 and up 13% by the end of February year-on-year, according to state committee on statistics Goskomstat.



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