Country risk in Russia is moderate. The OECD country credit grade is 4. Russia’s sovereign credit ratings have risen into investment grade territory in recent years, supported by a gradually improving economic outlook and preservation of large fiscal and external buffers. Overall, this indicates a moderate likelihood that Russia will be unable and/or unwilling to meet its external debt obligations.
Russia’s business climate ranked 28th out of 190 economies on the World Bank’s ease of doing business scorecard. Russia outperforms emerging European neighbours on several indicators, including starting a business, dealing with construction permits, registering property and getting electricity and credit. However, protecting investors and trading across borders are somewhat more difficult in Russia compared to regional peers. The state continues to play a large role in the economy. Private enterprises are technically allowed to compete with state corporations on the same terms and conditions, but things can be very different in practice.
The risk of expropriation is moderate to high. For example, the Russian authorities seized assets of the Yukos Oil Company in 2003, which at the time produced 20% of Russia’s oil output.
Political risk remains a key concern for investors. The potential for additional Western sanctions could further hinder business confidence and investment. There is also uncertainty about political leadership and the policy outlook once President Vladimir Putin’s term ends in 2024.
World Bank governance indicators show that Russia is below the emerging European average on all measures of governance.