Regional Disparity
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RUSSIA’S RETAIL MARKET: TRENDS AND OPPORTUNITIES Summary of contents Russia’s economic outlook Russia’s retail sector Case studies Opportunities Russia’s economic outlook Since 1999 Russia has experienced outstanding growth rates, constantly improving macroeconomic conditions, and a growing involvement in the global economy. These achievements, together with high world oil prices, political and economic stability, and skyrocketing foreign direct investment have all contributed to the growth of the country’s economy. Russia’s growth: Russia is the fastest growing economy in the G8 group of industrialized nations. Over the last seven years, Russia’s economy has grown by an average rate of 6.8 percent each year and is projected to grow at an average rate of at least 7 percent YOY through 2010. In 2006 and 2007 Russia’s growth exceeded all expectations (7.9 percent GDP growth), accelerating in several key economic sectors such as retail, real estate, tourism, and communications. Russia’s stability: Russia has a very stable macroeconomic situation. Inflation runs below 10 percent, foreign currency and gold reserves have increased to around $400 billion and are now the world’s third largest, after China and Japan.1 The strength and stability of the economy was noted by the major credit rating agencies (S&P, Moody’s, and Fitch), all of which, awarded Russia an upgraded investment rating in 2006.2 In addition, the stable political environment has contributed to making the country one of the favorite destinations in the region for foreign investors. Investment: The excellent macroeconomic conditions make Russia a thriving capital market that foreign investors are increasingly finding more attractive. Foreign investment for the first half of 2007 totaled $67 billion, 3 compared, for instance, to $14 billion in Poland in
RUSSIA’S RETAIL MARKET: TRENDS AND OPPORTUNITIES Summary of contents Russia’s economic outlook Russia’s retail sector Case studies Opportunities Russia’s economic outlook Since 1999 Russia has experienced outstanding growth rates, constantly improving macroeconomic conditions, and a growing involvement in the global economy. These achievements, together with high world oil prices, political and economic stability, and skyrocketing foreign direct investment have all contributed to the growth of the country’s economy. Russia’s growth: Russia is the fastest growing economy in the G8 group of industrialized nations. Over the last seven years, Russia’s economy has grown by an average rate of 6.8 percent each year and is projected to grow at an average rate of at least 7 percent YOY through 2010. In 2006 and 2007 Russia’s growth exceeded all expectations (7.9 percent GDP growth), accelerating in several key economic sectors such as retail, real estate, tourism, and communications. Russia’s stability: Russia has a very stable macroeconomic situation. Inflation runs below 10 percent, foreign currency and gold reserves have increased to around $400 billion and are now the world’s third largest, after China and Japan.1 The strength and stability of the economy was noted by the major credit rating agencies (S&P, Moody’s, and Fitch), all of which, awarded Russia an upgraded investment rating in 2006.2 In addition, the stable political environment has contributed to making the country one of the favorite destinations in the region for foreign investors. Investment: The excellent macroeconomic conditions make Russia a thriving capital market that foreign investors are increasingly finding more attractive. Foreign investment for the first half of 2007 totaled $67 billion, 3 compared, for instance, to $14 billion in Poland in