Mutual Funds Investing in Russia
Russia's GDP is ninth in the world and grows at 6.8% a year. Its GDP for 2005 was $1.589 trillion and its GDP per capita is $11,000. The economy under Vladimir Putin has improved. The middle-class is growing. Putin has kept inflation down to a lower level than Russia has seen in past years. He has stabilized the country by putting gangsters in jail. Things are improving, and Russia has hit a high of economic growth."Richer, bolder-and sliding back"
"Admirers of President Vladimir Putin, who plays host to the G8 summit in St Petersburg this weekend, argue that the new wealth so conspicuous in Moscow has spread to other parts of Russia too. They are right. Compared with the 1990s, says Svetlana Garipova of the municipal government, it is "absolutely another country"." If the growth rate of the current economy is sustained, Russia will become the second-largest economy in Europe after Germany and the sixth-largest in the world within a few years. High oil prices would help with this level of growth. Housing prices have more than doubled in Moscow. This is really a good sign of economic growth, as buyers in Russia do not take out mortgages but instead pay cash. What happens in Moscow is extremely important to the country as a whole: despite having only 10% of the Russian population, Moscow contributes one third of the country's GDP. Moscow's economy is therefore a good indicator of where the country as a whole is heading. Oil prices are up, which is good for an oil-rich country like Russia. Global demand for oil shows no sign of diminishing, especially with the rise of oil-hungry powers like China. According to the above Economist article, "Russia [is] precariously dependent on the oil price." This is not a problem when oil is such a valued, precious and rare commodity as it is in today's world. Russia is in an enviable position as far as its level of natural resources. In fact, much of Russia's exports-- timber, oil, natural gas, and metals, which together account for 80% of exports-- are due to its abundant natural resources, and all of these commodities are experiencing highs in the world market, with no sign of a comedown. A decline in prices is not foreseeable in the future. These prices are not thought to diminish any time soon and many countries stand in envy of Russia's abundant natural resources. From 2000 to 2005, consumer demand internally has grown by 12% each year, which is a good sign of a modern economy. Foreign investors are extremely important to Russia. The country's importance in the world is becoming more apparent to more and more of these investors, who are wanting a slice of the country's oil wealth. Russia is also planning to ascend to the World Trade Organization (WTO) within the next year, proving that it can stand among the largest and most important economies in the world. Admission to the WTO is contingent upon being open to foreign investment, and Russia is proving itself in that area. Its growth in recent years has been remarkable-- a 48% expansion in GDP between 1998 and 2005, expansion in real incomes by 46%. Industrial production has been growing every year. Poverty is at an all-time low. The federal budget surplus is about 5%, which means the country is in good fiscal condition. Unemployment is at an all-time low. Standard & Poor's has given Russia an investment grade rating. Now is as good a time as ever to invest in Russia. For more information on mutual funds investing in Russia, see the website at http://www.offshoreinvestingsecrets.com
DO
YOU HAVE ANY QUESTIONS? Offshore
Investing Home | Support |
