January 18th, 2012

Business confidence in Russia dips into the red

Business optimism in Russia dropped from plus-15 percent in the first quarter of last year to minus-four percent in the fourth quarter of 2011 according to Grant Thornton’s International Business Report. As noted by Russia Profile, this represents the most dour outlook among the four BRIC countries, with Brazilians the downright rosy about their economic prospects (plus-74 percent), followed by the Indians (plus-58 percent) and Chinese (plus-22 percent).

(Ratings are calculated by subtracting the percentage of pessimists from the number of optimists. Negative numbers indicate more pessimists than optimists).

What is causing this lack of confidence on the economic front?

“The sharp drop in economic optimism in the fourth quarter after Vladimir Putin’s decision to reclaim the presidency next year is positive proof that the political situation plays a role,” said Elsa Bikchurina, a senior analyst at the Solid Investments financial company.

“Right now, small and medium-sized businesses are extremely cautious and unwilling to take chances” since they have “no clarity as to what the future holds,” added Dmitry Orlov, the core shareholder and CEO of a mid-sized bank Vozrozhdeniye.

For IBR’s survey owners and directors of 100 small and medium-sized Russian businesses interviewed.

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