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More Intervention and Higher Tariffs in Russia’s Economy

Here’s an interesting outlook on the Russian economy from an analyst at Credit Suisse. More expropriations, greater regulation, and higher tariffs to come… Financial Times:

Government intervention in Russia should be a focus for the stock market as the state’s direct involvement in the economy and various industries is likely to grow once Dmitry Medvedev takes office as president, says Vladimir Savov, Russian equity strategist at Credit Suisse.

“The success of Russia’s economic policies and, to some extent, the performance of its stock market, will be dependent on policy-makers managing to find the right mix of liberal initiatives, social spending and regulation,” Mr Savov says.Credit Suisse says the Russian state may continue to bring assets under its control, particularly in sectors such as machine-building, aviation, defence and automobiles.“Tariff regulation [in addition to the rouble exchange rate] is perhaps the only meaningful lever the government has to fight inflation,” says Mr Savov, who expects to see slow growth in tariffs in the previously fairly friendly regime for fixed-line telecommunications.Credit Suisse also expects small-scale but positive changes in taxation in the oil sector but notes that new taxes have been introduced in the fertiliser sector that, with mining, is seeing greater government scrutiny of taxation issues.Mr Savov notes Russia’s government appears to be increasing anti-monopoly policies in sectors like utilities, retail, telecoms and banking – all areas that previously enjoyed more liberal regulatory regimes.