Investment in Russia and Eastern Europe Message Board

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Strategies & Market Trends : Investment in Russia and Eastern Europe

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To: Paul Berliner who wrote (951)	3/29/1999 4:30:00 PM
From: Rob Shilling	Read Replies (3) of 1301

Paul, considering that there has been no IMF deal for 6 months, "some sort of deal" is great news. The IMF is just protecting itself from backsliding by the Russian government in between today and next week when the next IMF team comes to Moscow. The IMF dropped its goal of a 3.5% primary surplus, Russia's goal was 1.5%, and they came in at 2-2.5% in the first two months. However, oil prices averaged $11 in January, and $10.5 in February, currently oil prices have trended up to $14.5 (for Brent). Considering that 75% of Russia's tax revenues are from oil and gas (oil and gas are 50% of the economy), budget revenues are going to get even better in the near term. Also, an IMF deal opens the way for restructuring the soviet debt. So, Russia is looking at a dramatically reduced foreign debt burden and a rebound in commodity prices. All this with a budget in place that is very austere. The "crisis" is just about over. BTW, GDP growth of 1-2% is expected this year.

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