During the St. Petersburg International Economic Forum (SPIEF) on Friday, Russian President Vladimir Putin unveiled a significant shift in the country’s trade landscape. Nearly 40% of Russia’s trade turnover is now conducted in rubles, up from about 30% just a year ago and much higher than the 15% level before the conflict in Ukraine.
The proportion of transactions that utilize USD, euros, and other Western currencies that Russia considers “unfriendly” has decreased. The payments for Russian exports in these currencies alone dropped by half last year. Putin announced that Russia aims to boost the usage of currencies from BRICS member countries, which include emerging markets like Brazil, Russia, India, China, and South Africa. He emphasized that these countries are working on establishing a payment system that is independent and free from political pressure, fraud, and external sanctions.
According to Putin, it is essential to focus on establishing strong ties with friendly countries, as they are crucial in shaping the global economic landscape and already account for three-quarters of Russia’s trade volume. This statement comes as the Kremlin looks to form new partnerships with countries in Asia, Latin America, and Africa during the SPIEF.
Putin outlined plans for significant reforms in Russia’s financial markets, aiming to double the value of the stock market by the end of the decade, reduce imports, and increase investments in fixed assets. Despite facing Western sanctions in response to the conflict in Ukraine, Russia’s economy is forecasted to grow faster than all advanced economies this year by the IMF.
The Russian government believes that Western sanctions have encouraged self-reliance and led to increased private consumption and domestic investment. In addition, shifts in oil and commodity exports to countries like India and China have helped Russia maintain strong revenues from exports. The Ministry of Economy projects steady GDP growth and a decline in the ruble value over the coming years.
Overall, Russia’s economic future looks promising
