Russia's economy will benefit from thaw with Trump

Subject

Russia-US relations and its impact on the Russian economy.

Significance

Cautious hopes of improvement in US-Russian relations have boosted investor sentiment towards the Russian economy. Improved relations have the potential to spur Russian economic recovery, backed by stabilising global oil prices and reviving domestic demand. US President-elect Donald Trump's more favourable stance give Russian assets a perceived comparative advantage over other emerging economies, encouraging short-term speculative investment.

Impacts

• A complete or partial lifting of US sanctions would encourage the EU to take similar action.
• Improved relations will divert funds to Russia from other emerging markets.
• A renewed flow of US technology and know-how would benefit Russian financial institutions and corporates.
• Russian oil companies will exploit US technologies to develop Arctic deposits.