Executive Search in Russia – 2019 Outlook
Politics continue to overshadow Economy in Russia
Politics dominates the headlines as we move into a new year.
The reelection of Vladimir Putin as president for an unprecedented fourth term in 2018, continued tensions with Europe and the United States, the expulsion of Russian diplomats from several countries, and a growing list of international sanctions on Russia are some of the trending topics of discussion. All of this often takes the spotlight away from Russia’s economy.
Oil is the backbone of Russian economy. Since 2014, oil prices have been on the decline, dealing a major blow to the economy, but the economy returned to growth in 2017.
The government predicted GDP growth of 2.1% in 2018 but cut it to 1.8%. Estimates for 2019 by the international financial institutions (IFIs) range from unchanged to 1.4%
Relatively higher oil and commodity prices have helped boost economic activity and have replenished state coffers. The labor market has tightened and real wages are on the rise as salary increases for state workers, promised in 2012, were put into effect before the presidential election. Inflation remains dormant due to a relatively stronger ruble. Monetary policy has been eased and there is likely room for further loosening.
Russia has also climbed the ranks in terms of competitiveness and ease of doing business. On the surface, the Russian economy is doing better than in the recent past.
However, there are always risks—the banking sector commonly remains a cause for concern, Russia’s labor force is shrinking, productivity appears stagnant, and the economy continues to be heavily dependent on hydrocarbons.
The outlook for executive search and hiring is not particularly strong and we keep on working for Russian and western partners in neighboring Kazakhstan, Ukraine, Belorussia and other former USSR countries.