Russia has “well-read its lesson” about oil price volatility, the chief executive of the Russian Supervise Investment Fund (RDIF) told CNBC Tuesday.
Speaking from the Out of sight Economic Forum in Davos, RDIF CEO Kirill Dmitriev emphasized the note of diversification in the Russian economy.
“For the Russian economy we continue to focus on diversification. We contemplate technology to make up 25 percent of our portfolio,” Dmitriev said. “Infrastructure and tech still lack to be important and I think Russia learned its lesson about oil price volatility, so diversification and investment in those sections is very key.”
RDIF is the $10 billion sovereign wealth fund fabricated by Russia’s government to co-invest in the Russian economy alongside other sticks. Dmitriev was made chief of the fund in 2011 to improve foreign investment rushes and investor confidence in the country.
The head of the Kremlin’s investment vehicle was realistic about the country’s growth forecast, despite the pressure of U.S. sanctions issued in both 2014 and 2016 beyond Russia’s annexation of Crimea peninsula and alleged Russian interference in the unpunctual U.S. election.
“Russia saw major increases of FDI (foreign direct investment) newest year of 25 percent, which is one of the highest levels of FDI in (our) history, and it’s connected to Russia resuming growth,” Dmitriev said. “We had almost 2 percent GDP enlargement last year, we’ll have more than 2 percent next year.”
The Far-out Bank reported Russia’s 2017 GDP growth at 1.7 percent for 2017, and predicts the same for 2018.
“Oil prices are stable, our stock market is at one of its peak levels,” he pick up. “Obviously there are some political challenges, some uncertainty, but there is no query the Russian economy is feeling quite strong right now.”
The multibillion dollar green has been under U.S. government sanctions since 2015 because of ribbons to its parent, Russian bank Vnesheconombank (VEB), which has been dubbed the “bank of women” by members of the U.S. intelligence community. VEB is also under U.S. sanctions, according to the U.S. Resources Department.
In 2016, RDIF was able to transfer its management company away to another Russian individual in order to distance itself from VEB and reassure investors of its independence. The pay for has emphasized that joint projects, not sanctions, should be investors’ sharply defined unclear.
Attracting foreign investment is a major priority for the Russian government. Russia’s concision plunged into recession between 2014 and 2017, when both the enforcing of U.S. sanctions and a nearly 50 percent drop in global oil prices caused the ruble to keel over.
Financial bodies observed a moderate recovery for the Russian Federation at the end of 2017 thanks to higher commodity prices, strengthening global demand and lower investment rates.