There is a possibility that Russia's economy will attract a huge number of foreign investors, according to Kirill Dmitriev, Chief Executive of the Russian Direct Investment Fund (RDIF).
The International Monetary Fund (IMF) predicts that Russia's economy could see growth this year because its recession hasn’t been as bad as first expected. In 2016, the IMF predicted a narrowing of 0.8% in Russia's GDP. This year, the IMF predicts a growth of 1.1% for the country.
"The Russian economy really went through some difficult times but as of the beginning of the year it really reached a floor and is coming up and we expect growth to resume at the end of this year or early next year," Dmitriev said in an interview. "For us, we are still producing positive dollar returns, even with the rouble devaluation all of our investment partners produced positive dollar returns so definitely we see a big opportunity for Russia and our stock market is up around 40 percent in dollar terms from the beginning of the year."
Russia's economy entered into a recession last year amid the global slump in oil prices. Russia currently competes with Saudi Arabia as the world’s biggest exporter of oil, accounting for about 13% of the world's total supply. It is also the second-largest manufacturer of natural gas behind the US. According to FXCM, Russia's gas sales account for over 60% of the county's export revenues, and about 50% of the revenues of federal tax.
To date, Russia exports account for approximately US $350 billion every year in oil and other fossil fuels. The country has benefitted from the recent conflicts in the Middle East, which increased the prices of oil to over $100 per barrel. The oil and gas industry makes up for about a fifth of Russia's GDP.
Foreign investment is an important part of Russia's economy. The RDIF is a sovereign wealth fund governed by the Russian government, with $10 billion of reserved capital.
Since the RDIF was founded about half a decade ago, it has scoured the world foreign investments to help grow Russia's agriculture, retail, real estate and health care industries. To date, the RDIF has managed to drum up over $25 billion in foreign assets for the Russian economy, with several long-term associations with investors from different countries.
Dmitriev spoke at the most recent Russian Calling Investment Forum by the VTB Bank and he said that his country was open to cooperate with all of the major players in the world. He also said that the RDIF was looking at investing in more infrastructure projects this year, both in Russia and in foreign territories.
"We continue to focus on large transactions so we will be investing in Pulkovo, which is a major airport in St. Petersburg, jointly with major Middle Eastern investors," said Dmitriev. He went on to say "...And we'll be focusing on infrastructure and other key areas that produce positive dollar results to our investors despite the rouble devaluation."