The Moody’s credit rating agency has expressed “some uncertainty as to the direction of [Russian] economic policy” following the “abrupt change in government” which took place this week, but maintains a positive outlook on its overall trajectory.
“Statements from both the president and new prime minister suggest that the new administration will maintain the previous government’s overall policy direction of aiming to raise economic growth and improve social indicators while maintaining broad macroeconomic stability,” the agency noted.
The agency, which upgraded Russia’s long credit rating to BAA3 with a stable outlook last year, also stated that Russia should be able to cope with higher state spending outlined by the Russian president in his speech to the Federal Assembly last week thanks to low public debt and its $500 billion+ reserve cushion, and expects economic growth to increase to 1.5 percent in 2020 and 1.7 percent in 2021.
Earlier, Kirill Dmitriev, CEO of the Russian Direct Investment Fund sovereign wealth fund, said he expects the Mishustin government to focus “on growth, attracting additional investments and increasing the pace of implementation of national projects – the tasks which were outlined by the president in his Federal Assembly address.” Dmitriev believes these measures should help increase economic growth from 2 percent now to 3 percent in 2021.
Despite the change of government and the replacement or reshuffle of many of its ministers, key appointees including Sergei Lavrov and Sergei Shoigu have maintained their posts at the foreign and defence ministries respectively. Furthermore, much of the economic bloc of the Medvedev government, including energy minister Alexander Novak, minister of trade Denis Manturov, and minister of finance Anton Siluanov have kept their seats. Siluanov has been a key proponent of Russia’s continued integration into the world economy, and its integration into global institutions including the International Monetary Fund, the World Bank and the World Trade Organization.