Russia’s fiscal stimulus offers a one-year consumer play

Overview

We believe the Russian government’s fiscal strategy, which is playing out now in the implementation of the 2009 federal budget and in the Finance Ministry’s newly unveiled budget plan for 2010-12, will deliver a powerful – but short-lived – growth boost. This prospect stems from the bias of the fiscal stimulus towards consumption rather than investment. In part, this is a pragmatic response to the crisis similar to the responses of other major countries – with Russia in better shape to...