Central Bank Report: Russia’s Business Climate is Improving

The expansion of U.S. sanctions against Russian in April hasn’t had any substantial impact on the economic activity in the country, a recent report by the Bank of Russia says.

According to Izvestya, the central bank report said that as many as 70% of Russian companies have felt no effects whatsoever from the fresh restrictive measures. Entrepreneurs polled by the Bank of Russia also say the business climate in Russia has improved over the past few months.

At the same time, the situation in the financial markets is expected to remain stable, while the risks of a worst-case scenario are estimated as low, the central bank said.

The business climate in Russia can be described as neutral, says Georgy Ostapkovich, Director of the Center for Business Tendencies Studies at the Higher School of Economics.

To change it, it is necessary to pass the relevant laws aimed at improving conditions for doing business. For most Russian businesses, sanctions have indeed gone unnoticed, the expert, adding that they have however affected the biggest companies which are systemically important the country.

Global aluminum giant Rusal, owned by billionaire oligarch Oleg Deripaska, has been most affected by Washington’s restrictive measures, with its stocks falling to a historic low after the U.S. Treasury announcement in April.

The Russian government is planning measures to protect the businesses affected by sanctions. The proposed moves include the creation of two offshore zones in Russia’s western exclave of Kaliningrad and the Far East, where companies could be registered and pay taxes on special terms.