The Russian Fashion Retail Market - Igedo Company

1.4. Imports back on the growth path
September 2010, cisstat.com, first semester key macro indicators
As it is commonly known due to the lack of diversified industry basis, Russia is
highly dependant on imports of both, industrial products and consumer goods.
From 2000 till 2008, imports from third countries, excluding CIS-nations rose at
an average annual rate of 29 per cent . The peak was reached in 2007, when
imports surged by 47 per cent against 2006. In 2008 growth slowed down by 23
per cent against the year before an it plummeted at a rate of 37 per cent in 2009.
The turnaround has been reached over the first quarter of this year, when imports
from third countries rose by 17,2 per cent compared to the first three months of
2009. At the end of the first semester of this year imports picked up at a
cumulated rise of 28, 6 per cent.
1.5. Capital investments keep increasing: higher yields
August 30, 2010, Handelsblatt/Investment Strategies
According to Matthias Siller, manager of Barings Russia Fund, the country is the
cheapest market for investors at a time right now when fundamental economic
data for Russia are commonly considered as very convincing. As Siller says, global
portfolio investors find no way around Russia for getting higher yields than here.
Shocked by the Euro-crisis in May, this year, global institutional investors jumped
on Russian government bonds issued in Roubles and US Dollars, bringing the
investor an annual yield of 5,4 per cent. According to Segei Arsenyev, analyst at
Goldman Sachs, he expects high profit margins from investments in stock of
Russian trading and retail companies selling consumer products as well as raw
materials for industrial use.
1.6. Inflation likely to rise
3 rd Quarter 2010, The Global Blue Respective/ Handelsblatt
Although monthly inflation came down from 8 per cent at the beginning of this
year to 3,6 per cent in May, forecasts of the Russian Ministry of Finance aiming at
an average inflation rate of 5 to 6 per cent for 2010, may not come true.
According to the US economist Nourid Roubini, there are a number of indicators
pointing at an overall inflation rate possibly reaching 8 per cent this year. Higher
inflation than originally forecasted by the government may result from strong
rising prices for wheat, other foodstuffs and basic commodities, raw materials,
increase of salaries and wages such as from a declining US $ in combination with
a stronger € and a weaker Russian Rouble.
1.7. Fire devastation may cost Russia US $ 15 bn
August 11, 2010, Stuttgarter Zeitung
It is still premature to assess the economic and social damage caused by the
heat-wave and forest fire devastation which have hit Russia in July and August
2010. Experts speak of a cost burden of around US $ 15 bn resulting from this
catastrophy. Almost any economy sector has been directly or indirectly affected.
Mobile telephone providers were hit extremely hard because their networks
collapsed under destroyed transmission posts, telephone cable and networks.
Water supply was partially interrupted from the breakdown of power pumps.
Consumption of electricity surged because air conditioners operated at their
maximum capacity. In 27 Russian federal regions agriculture faces losses in crops
of wheat and other foodstuffs accounting for 20 percent below average summer
crops results. The government stopped wheat exports on August 5. This decree is
valid until December 31, 2010. Russia is the fourth largest wheat exporter world
wide and expects a negative effect on its balance of trade. According to Vladimir
Milov, former federal energy minister and leader of the liberal opposition party
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