Russian Federation

SEB MERCHANT BANKING – COUNTRY RISK ANALYSIS lÅíçÄÉê=OMI=OMMU

Analyst: Rolf Danielsen. Tel : +46 8 763 83 92. E-mail : rolf.danielsen@seb.se

Since the summer investor sentiment towards Russia has turned increasingly bearish with 
repercussions on the Russian banking system. That combined with rising risk of the present 
global slowdown becoming a long haul story with soft oil markets, could change the prospects of 
the Russian economy quite sharply. 

Country Risk Analysis

=
lîÉêÜÉ~íáåÖ=íìêåë=áåíç=ëäçïÇçïåK===
=
fåÑä~íáçå=êÉíìêåë=íç=ÇçìÄäÉ=ÇáÖáí=äÉîÉäëK=páåÅÉ=íÜÉ=ÖäçÄ~ä=Ñáå~åÅá~ä=íìêÄìäÉåÅÉ=ÄÉÖ~å=
ëçãÉ=NR=ãçåíÜë=~Öç=íÜÉ=çéÉååÉëë=çÑ=íÜÉ=oìëëá~å=Å~éáí~ä=~ÅÅçìåí=Ü~ë=ÉñéçëÉÇ=áí=íç=
íÜÉ=î~Ö~êáÉë=çÑ=áåíÉêå~íáçå~ä=ã~êâÉíëK==få=~ÇÇáíáçåI=oìëëá~=Ü~ë=ÄÉÉå=íÜêçìÖÜ=~å=
ÉäÉÅíáçå=óÉ~ê=ïáíÜ=éçêâJÄ~êêÉä=éçäáÅáÉëK==_çíÜ=ÉîÉåíë=êÉëìäíÉÇ=áå=~=ã~êâÉÇ=ïÉ~âÉåáåÖ=
çÑ=Ñáå~åÅá~ä=éçäáÅáÉëI=ïáíÜ=ãçåÉí~êó=éçäáÅáÉë=éêçÄ~Ääó=Ü~îáåÖ=íÜÉ=ä~êÖÉëí=áãé~Åí=~åÇ=
ëÉåÇáåÖ=íÜÉ=oìëëá~å=áåÑä~íáçå=ê~íÉ=íç=ÇçìÄäÉ=ÇáÖáí=íÉêêáíçêóK=eçéÉë=~ë=ä~íÉ=~ë=çÑ=íÜÉ=
ëìããÉê=OMMT=íÜ~í=áåÑä~íáçå=áå=oìëëá~=Ü~Ç=ÄÉÉå=ÄÉ~íÉå=çå=íÜÉ=êÉíêÉ~í=Ü~îÉ=ëáåÅÉ=
íìêåÉÇ=áåíç=Çáë~ééçáåíãÉåí=~ë=íÜÉ=ÅçåëìãÉê=éêáÅÉ=áåÇÉñ=Ü~ë=êáëÉå=íç=NRB=çå=~å=
~ååì~ä=Ä~ëáëK==^=é~êí=çÑ=íÜ~í=Ü~ë=ÅÉêí~áåäó=ÄÉÉå=áå=äáåÉ=ïáíÜ=áåíÉêå~íáçå~ä=íêÉåÇë=çÑ=
ÜáÖÜÉê=ÉåÉêÖó=~åÇ=ÅçããçÇáíó=éêáÅÉëI=Äìí=ãçëí=~å~äóëíë=~åÇ=íÜÉ=~ìíÜçêáíáÉë=êÉ~äáòÉ=
íÜ~í=íÜÉ=ã~àçê=ÇêáîáåÖ=ÑçêÅÉ=Ü~ë=ÄÉÉå=ÇçãÉëíáÅ=çîÉêÜÉ~íáåÖK===
= Money and credit growth
`êÉÇáí=ÇêáîÉå=ÖêçïíÜK==få=OMMTI= 60
íÜÉ=ÉÅçåçãó=~ÅÅÉäÉê~íÉÇ=íç=UKNB=
55
ÖêçïíÜ=~åÇ=ÅçåíáåìÉÇ=~í=~=Ñ~ëí=
Percent (annual)

Åäáé=ïÉää=áåíç=OMMUK==qÜ~í=ï~ë= 50
ÇêáîÉå=Äó=ã~åìÑ~ÅíìêáåÖ=~åÇ= 45
ëÉêîáÅÉë=ïÜáäÉ=çáä=~åÇ=Ö~ë= 40
éêçÇìÅíáçåI=ÅçìåíáåÖ=Ñçê=~êçìåÇ=~= 35
èì~êíÉê=çÑ=íÜÉ=ÉÅçåçãóI=Å~ãÉ=
30
~äãçëí=íç=~=ëí~åÇëíáääK==^ÖêáÅìäíìêÉI=
ÅçìåíáåÖ=Ñçê=RB=çÑ=íÜÉ=ÉÅçåçãóI= 25
2005 2006 2007 2008
~äëç=Ü~Ç=~=Ä~Ç=óÉ~ê=Å~ìëÉÇ=Äó=
éççê=Åäáã~íáÅ=ÅçåÇáíáçåëK==cçê=íÜÉ= Money supply M2
Ñáêëí=íáãÉ=áåîÉëíãÉåíë=Å~ãÉ=çìí=~ë= credits to private sector, RUB
Source: Reuters EcoWin

íÜÉ=ÇêáîáåÖ=ÑçêÅÉ=íç=dam=áå=OMMTI=
áåÅêÉ~ëáåÖ=áíë=ëÜ~êÉ=çÑ=íÜÉ=ÉÅçåçãó=íç=ãçêÉ=íÜ~å=ONB=EOPB=áåÅäìÇáåÖ=áåîÉåíçêáÉëFI=~=
ãçëí=ïÉäÅçãÉÇ=ëÜáÑí=áå=íÜÉ=Åçãéçëáíáçå=çÑ=ÇçãÉëíáÅ=ÇÉã~åÇ=ïáíÜ=êÉëéÉÅí=íç=
ÅçåíáåìÉÇ=ÖêçïíÜK=eçïÉîÉêI=íÜ~í=ï~ë=ä~êÖÉäó=ÇìÉ=íç=Äìçó~åí=ÅçåëíêìÅíáçå=~ÅíáîáíóI=
ïÜáÅÜ=êÉëéçåÇÉÇ=íç=~=ÜìÖÉ=ÅêÉÇáí=ÇêáîÉå=ÇÉã~åÇ=Ñçê=ÜçìëáåÖ=~åÇ=çíÜÉê=êÉ~ä=Éëí~íÉ=

important your attention is drawn to the statement on the back cover of this report which affects your rights.
SEB Merchant Banking Country Risk Analysis October 20, 2008

áåÅäìÇáåÖ=çÑÑáÅÉ=ëé~ÅÉ=áå=jçëÅçï=~åÇ=píK=mÉíÉêëÄìêÖK==få=OMMTI=Ä~åâëÛ=ÅêÉÇáí=
ÉñíÉåëáçå=~ÅÅÉäÉê~íÉÇ=íç=RMB=çå=~å=~ååì~ä=Ä~ëáëK==qÜ~í=ÇÉîÉäçéãÉåí=ï~ë=ÇÉåíÉÇ=Äó=
íÜÉ=ëìÇÇÉå=ÇêóáåÖ=ìé=çÑ=äáèìáÇáíó=áå=íÜÉ=ÑçääçïáåÖ=Ñ~ää=~ë=íÜÉ=ä~êÖÉ=Å~éáí~ä=áåÑäçïë=çÑ=
íÜÉ=Ñáêëí=Ü~äÑ=çÑ=OMMT=íÉãéçê~êáäó=íìêåÉÇ=áåíç=~å=çìíÑäçïK=eçïÉîÉêI=~ë=íÜÉ=ÅÉåíê~ä=
Ä~åâ=~ÅíÉÇ=íç=ÅçãéÉåë~íÉ=Ä~åâëÛ=êÉëÉêîÉ=äçëëÉë=íÜêçìÖÜ=ãçêÉ=ÖÉåÉêçìë=ìëÉ=çÑ=êÉéç=
~êê~åÖÉãÉåíë=~åÇ=íÜÉ=íê~åëÑÉê=çÑ=ãçåÉó=Ñêçã=ÖçîÉêåãÉåí=~ÅÅçìåíë=íç=ÅçããÉêÅá~ä=
Ä~åâëI=íÜÉ=Ä~ä~åÅÉ=áå=íÜÉ=áåíÉêJÄ~åâ=ã~êâÉÇ=íìêåÉÇ=Ä~Åâ=íç=“åçêã~äÒ=áÑ=íÜ~í=áë=~=ï~ó=
Çç=ÇÉëÅêáÄÉ=~=ëáíì~íáçå=çÑ=ÅäÉ~êäó=åÉÖ~íáîÉ=êÉ~ä=áåíÉêÉëí=ê~íÉëK==qÜ~í=Ö~îÉ=~=ëÜçêí=íÉêã=
Ñáääáé=íç=Ä~åâëÛ=ÅêÉÇáí=ÉñíÉåëáçå=áå=É~êäó=OMMUK==
=
qÜÉ=çáä=éêáÅÉ=ÅçãÉë=ÇçïåK==oÉéçêíë=Ñêçã=íÜÉ=Ñáêëí=Ü~äÑ=çÑ=OMMUI=áåÅäìÇáåÖ=Ñêçã=ïÉääJ
âåçïå=êÉéìí~ÄäÉ=çêÖ~åáò~íáçåëI=ÄÉÖáå=íç=ã~âÉ=ëçãÉ=éÉÅìäá~ê=êÉ~ÇáåÖK==tÜÉå=çáä=
éêáÅÉë=ïÉêÉ=~í=íçé=íÜÉ=ïçêäÇÛë=ä~êÖÉëí=çáä=~åÇ=Ö~ë=éêçÇìÅÉê=ã~ó=Ü~îÉ=äççâÉÇ=äáâÉ=~å=
ìå~ëë~áä~ÄäÉ=ëìÅÅÉëë=ëíçêóK==aÉëéáíÉ=íÜÉ=çåÖçáåÖ=ÅçåÅÉêåë=~Äçìí=íÜÉ=ïçêäÇ=ÉÅçåçãó=
ã~êâÉíë=ÅçåíáåìÉÇ=ÄÉáåÖ=ìéJÄÉ~í=çå=oìëëá~=~åÇ=d~òéêçãI=oçëåÉÑí=~åÇ=çíÜÉê=oìëëá~å=
ëí~íÉ=~åÇ=éêáî~íÉ=Åçãé~åáÉë=ïÉêÉ=~ÅíáîÉ=áå=íÜÉ=áåíÉêå~íáçå~ä=ÄçåÇ=~åÇ=ëóåÇáÅ~íáçå=
ã~êâÉíëK==qÜ~í=~ÇÇÉÇ=äáèìáÇáíó=íç=íÜÉ=ÇçãÉëíáÅ=ãçåÉó=ã~êâÉíI=~äíÜçìÖÜ=íÜÉ=ë~ãÉ=
Åçãé~åáÉë=ïÉêÉ=~äëç=ëÉåÇáåÖ=äçíë=çÑ=ãçåÉó=çìí=Ñçê=ãÉêÖÉêë=~åÇ=~ÅèìáëáíáçåëK==_ìí=çå=
gìäó=TI=íÜÉ=çáä=éêáÅÉ=E_êÉåíF=éÉ~âÉÇ=~í=ANQTLÄ~êêÉäI=ïÜáÅÜ=åçï=íìêåë=çìí=íç=Ü~îÉ=ÄÉÉå=
~=ÖäçÄ~ä=éÉ~â=íÜáë=íáãÉ=~êçìåÇK==tÜáäÉ=íÜÉ=íìêåJ~êçìåÇ=ï~ë=åçí=~=ÖêÉ~í=ÅçåÅÉêå=áå=
áíëÉäÑI=íÜÉ=ëìÄëÉèìÉåí=ëíÉÉé=Ñ~ää=íç=çåäó=Ü~äÑ=çÑ=íÜ~í=äÉîÉä=ëç=Ñ~ê=áë=~Äçìí=íç=Å~ìëÉ=
oìëëá~=ëÉîÉêÉ=ÜÉ~Ç=~ÅÜÉK=== Stock markets, Oil price
= % change since EM peak in Oct. -07

qÜÉ=ëíçÅâ=ã~êâÉí=êÉ~ÅíëK== 20 150
Putin
få=íÜÉ=Ñáêëí=Ü~äÑ=çÑ=OMMU= 10 Russia accuses 140
Mechel
íÜÉ=oìëëá~å=ëíçÅâ= 0 130
ã~êâÉí=Ü~Ç=ïÉ~íÜÉêÉÇ=
-10 120

USD/Barrel
íÜÉ=ÖäçÄ~ä=íìêÄìäÉåÅÉ= EM
èìáíÉ=ïÉääI=~åÇ=ÇÉÅäáåÉÇ= -20 110
Percent

Georgia
çåäó=ëäáÖÜíäó=ïÜáäÉ=çíÜÉê= -30 war 100
ÉãÉêÖÉêë=áåÅäìÇáåÖ= -40 90
`Üáå~=Ü~Ç=~äêÉ~Çó=í~âÉå= Oil price
-50 Oil price 80
ëçãÉ=ÜÉ~îó=ÄäçïëK= dives
eçïÉîÉêI=íÜÉ=ÉåÇ=çÑ=íÜÉ= -60 70
çáä=éêáÅÉ=Äççã=ëÉåí=íÜÉ= -70 60
ã~êâÉí=áåíç=~=í~áäëéáåK== okt feb apr jun aug okt
qÜ~í=ï~ë=Éñ~ëéÉê~íÉÇ=Äó= 2007 2008 Source: Reuters EcoWin

íÜÉ=Åä~ëÜÉë=ÄÉíïÉÉå=íÜÉ=
ÑçêÉáÖå=~åÇ=ÇçãÉëíáÅ=çïåÉêë=çÑ=qkhL_m=áå=ïÜáÅÜ=íÜÉ=~ìíÜçêáíáÉë=ïÉêÉ=ëÉÉå=~ë=
~ÅíáåÖ=áå=~å=ìåÉîÉå=Ü~åÇÉÇ=ã~ååÉê=íç=íÜÉ=ÄÉåÉÑáí=çÑ=íÜÉ=ä~ííÉêI=~åÇ=íÜÉå=íÜÉ=mjÛëI=
jêK=mìíáåI=éÉêëçå~ä=~ÅÅìë~íáçåë=~Ö~áåëí=çåÉ=çÑ=oìëëá~Ûë=ä~êÖÉëí=ëíÉÉä=ã~âÉêëI=jÉÅÜÉäI=
Ñçê=éêáÅÉ=ÖçìÖáåÖK==qç=íçé=íÜÉ=~ÖÉåÇ~=çÑ=åÉÖ~íáîÉ=åÉïë=Ñçê=íÜÉ=ã~êâÉíëI=Å~ãÉ=íÜÉ=
ÅçåÑäáÅí=ïáíÜ=dÉçêÖá~I=ïÜáÅÜI=êÉÖ~êÇäÉëë=çÑ=ïÜçÉîÉê=ï~ë=ìäíáã~íÉäó=êÉëéçåëáÄäÉI=
ëìêéêáëÉÇ=ã~åó=ã~êâÉí=é~êíáÅáé~åíë=~åÇ=éêçÄ~Ääó=äÉÇ=íç=~=êÉ~ëëÉëëãÉåí=çÑ=éçäáíáÅ~ä=
ëí~Äáäáíó=áå=oìëëá~K==^ë=~=êÉëìäí=çÑ=~ää=íÜÉëÉ=ÉîÉåíëI=íÜÉ=ëíçÅâ=ã~êâÉí=éäìåÖÉÇ=íç=äÉëë=
íÜ~å=PMB=ÄÉäçï=áíë=óÉ~ê=~Öç=î~äìÉ=~ë=ãÉ~ëìêÉÇ=Äó=íÜÉ=oqp=áåÇÉñK==qÜ~í=áë=éêçÄ~Ääó=
åç=ãçêÉ=íÜ~å=`Üáå~=Äìí=íÜÉ=êÉÅÉåí=oìëëá~å=Çêçé=Ü~ë=ÄÉÉå=ãìÅÜ=ëíÉÉéÉêK==
=
j~êÖáå=Å~ääë=áåÅêÉ~ëÉK==tÜáäÉ=êÉä~íáîÉäó=ÑÉï=oìëëá~å=Ä~åâë=Ü~îÉ=ÄÉÉå=ÇáêÉÅíäó=
áåîçäîÉÇ=íÜÉãëÉäîÉë=áå=ÄìóáåÖ=ëíçÅâëI=ã~åó=çÑ=íÜÉã=Ü~îÉ=äÉåí=ÜÉ~îáäó=íç=Åçãé~åáÉë=
~åÇ=çíÜÉêë=ïÜáÅÜ=Ü~îÉ=ê~áëÉÇ=Ä~åâ=äç~åë=ïáíÜ=ëÜ~êÉë=~ë=Åçää~íÉê~äK==^ë=íÜÉ=î~äìÉ=çÑ=
íÜÉ=Åçää~íÉê~ä=Ü~ë=åçëÉ=ÇáîÉÇI=ÇÉÄíçêë=Ü~îÉ=ÄÉÉå=~ëâÉÇ=íç=íçé=çÑÑ=ïáíÜ=Å~ëÜ=Eã~êÖáå=
Å~ääëFK==_ó=~ää=äáâÉäáÜççÇI=ëçãÉ=ÄçêêçïÉêë=Ü~îÉ=~äêÉ~Çó=Ñ~áäÉÇ=íç=ãÉÉí=íÜçëÉ=Å~ääëI=

2
SEB Merchant Banking Country Risk Analysis October 20, 2008

íÜÉêÉÄó=íÜêÉ~íÉåáåÖ=íÜÉ=ëçäîÉåÅó=çÑ=íÜÉáê=ÅêÉÇáíçêëK==få=~å=Éñíê~çêÇáå~êáäó=Ñê~ÖãÉåíÉÇ=
~åÇ=áåíê~åëé~êÉåí=oìëëá~å=Ä~åâ=ã~êâÉíI=íÜ~í=Ü~ë=Å~ìëÉÇ=íÜÉ=áåíÉêÄ~åâ=ã~êâÉí=çåÅÉ=
~Ö~áå=íç=ÅäçÖ=ìé=áå=íÜÉ=ë~ãÉ=ï~ó=~ë=áå=tÉëíÉêå=ã~êâÉíë=~ÑíÉê=íÜÉ=ëìÄJéêáãÉ=Åêáëáë=
ÄêçâÉ=çìíK==cçê=íÜÉ=ë~ãÉ=êÉ~ëçå=éêÉîáçìë=Å~éáí~ä=áåÑäçïë=Ü~îÉ=êÉîÉêëÉÇ=ÇáêÉÅíáçå=íç=
çìíÑäçïë=~ë=ã~åó=áåîÉëíçêë=ÑáåÇ=ÄÉííÉê=çééçêíìåáíáÉë=~Äêç~ÇI=ÇÉëéáíÉ=éêçÄäÉãë=~äëç=
íÜÉêÉK==få=Ñ~ÅíI=áí=áë=èìáíÉ=éçëëáÄäÉ=íÜ~í=ÉîÉå=ÑçêÉáÖå=áåîÉëíçêë=Ü~îÉ=éìääÉÇ=çìí=Ñêçã=
oìëëá~=íç=ëÜçêÉ=ìé=íÜÉáê=åÉÉÇ=Ñçê=äáèìáÇáíó=Ä~Åâ=ÜçãÉI=ãìÅÜ=~ë=íÜÉ=ëíçêó=Ü~ë=ÄÉÉå=Ñçê=
ëÉîÉê~ä=ÉãÉêÖáåÖ=ã~êâÉí=ÅçìåíêáÉë=áå=êÉÅÉåí=íáãÉëK===
=
mêáî~íÉ=ëÉÅíçê=ÇÉÄí=ã~íìêÉëW=^ë=íÜÉ=ÖçîÉêåãÉåí=áå=êÉÅÉåí=óÉ~êë=é~áÇ=Ä~Åâ=ãçëí=çÑ=áíë=
ä~êÖÉ=ÇÉÄí=Ñêçã=íÜÉ=NVVMë=I=íÜÉ=éêáî~íÉ=ëÉÅíçê=ëíÉééÉÇ=ìé=áíë=ÄçêêçïáåÖ=Ñêçã=
áåíÉêå~íáçå~ä=Å~éáí~ä=ã~êâÉíëK==^ÅÅçêÇáåÖ=íç=cáíÅÜI=èìçíáåÖ=ÅÉåíê~ä=Ä~åâ=ëí~íáëíáÅëI=íÜ~í=
Ü~ë=äÉÑí=íÜÉ=Ä~åâë=ïáíÜ=~=íçí~ä=ÑçêÉáÖå=ÇÉÄí=çÑ=ANVP=ÄáääK=~åÇ=Åçêéçê~íÉë=ïáíÜ=AOVP=ÄáääK=
E=ÉåÇJgìåÉFI=çÑ=ïÜáÅÜ=AQM=ÄáääK=Ñ~ääë=ÇìÉ=áå=íÜÉ=ÑçìêíÜ=èì~êíÉê=çÑ=OMMU=~åÇ=AOS=ÄáääK=áå=
íÜÉ=Ñáêëí=èì~êíÉê=çÑ=OMMV=ïáíÜ=ëçãÉ=ATR=ÄáääK=Ñ~ääáåÖ=ÇìÉ=íÜêçìÖÜ=íÜÉ=êÉëí=çÑ=íÜ~í=óÉ~êK==
tÜáäÉ=åçí=~ä~êãáåÖäó=ÜáÖÜ=Ñçê=~=Åçìåíêó=çÑ=oìëëá~Ûë=ïÉ~äíÜ=~åÇ=ëí~ÖÉ=çÑ=ÇÉîÉäçéãÉåí=
íÜÉëÉ=~êÉ=åÉîÉêíÜÉäÉëë=ä~êÖÉ=~ãçìåíë=~åÇ=~ííÉãéíë=~í=íÜÉáê=êÉÑáå~åÅáåÖ=ÅçìäÇ=äÉ~Ç=íç=
ã~êâÉí=ÜáÅâJìéë=áå=~å=ÉåîáêçåãÉåí=ïÜÉêÉ=éêÉëÉåí=ÇáÑÑáÅìäí=ã~êâÉí=ÅçåÇáíáçåë=ëíáää=
éêÉî~áäK==qÜÉ=ã~íìêáíáÉë=~êÉ=ïÉää=ÅçîÉêÉÇ=Äó=ÅÉåíê~ä=Ä~åâ=ÑçêÉáÖå=êÉëÉêîÉëI=ÜçïÉîÉêI=
Äìí=íÜÉ=~ìíÜçêáíáÉëÛ=~Äáäáíó=íç=Ü~åÇäÉ=ëìÅÜ=~=ëáíì~íáçå=áë=~Ö~áå=ìåíÉëíÉÇK==cáíÅÜ=åçíÉëI=
ÜçïÉîÉêI=íÜ~í=íÜÉëÉ=ã~íìêáíáÉë=~äëç=áåÅäìÇÉ=Ä~åâ=ÇÉéçëáíë=~åÇ=íê~ÇÉ=ÅêÉÇáíë=ïÜáÅÜ=
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=
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OMMTI=íÜÉ=ÅÉåíê~ä=Ä~åâ=Ü~ë=~ÅíÉÇ=íç=éêÉJÉãéí=ÉëÅ~ä~íáçå=çÑ=íÜÉ=éêçÄäÉãë=Äó=ëÉîÉê~ä=
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• j~âáåÖ=ARM=Äáää=~î~áä~ÄäÉ=Ñçê=ÉñíÉêå~ä=ÇÉÄí=êÉé~óãÉåí=ã~íìêáåÖ=ÄÉÑçêÉ=óÉ~ê=ÉåÇ=
• oÉÇìÅáåÖ=áíë=êÉÑáå~åÅáåÖ=ê~íÉ=Äó=NIR=éÉêÅÉåí~ÖÉ=éçáåíë=B=íç=UIORB=é~K=
• ^=äç~å=íç=sb_=Eëí~íÉ=Ä~åâF=íç=í~âÉ=çîÉê=~å=~áäáåÖ=éêáî~íÉ=Ä~åâ=
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3
SEB Merchant Banking Country Risk Analysis October 20, 2008

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4
SEB Merchant Banking Country Risk Analysis October 20, 2008

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5
SEB Merchant Banking Country Risk Analysis October 20, 2008

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mìíáåI=áë=ìåÇáëéìíÉÇ=Äó=~åó=ëÉêáçìë=çÄëÉêîÉêK==qÜ~í=ÇÉêáîÉë=åçí=çåäó=Ñêçã=Üáë=êÉáÖå=
çîÉê=çåÉ=çÑ=íÜÉ=ãçëí=ëéÉÅí~Åìä~ê=ÖêçïíÜ=éÉêáçÇë=oìëëá~=Ü~ë=ÉîÉê=ÉñéÉêáÉåÅÉÇI=Äìí=
~äëç=Ñêçã=íÜÉ=Ñ~Åí=íÜ~í=ÜÉ=éêÉëÉåíÉÇ=ëçãÉ=êÉëíçê~íáçå=çÑ=äáîáåÖ=ëí~åÇ~êÇë=Ñçê=íÜÉ=
Åçããçå=ã~åI=~ÑíÉê=íÜÉ=vÉäíëáåJÉê~=çÑ=íÜÉ=NVVMë=Ü~Ç=ÅêÉ~íÉÇ=~=ó~ïåáåÖ=Ö~é=ÄÉíïÉÉå=
êáÅÜ=~åÇ=éççêK==eáë=ëìÅÅÉëëçêI=mêÉëáÇÉåí=jÉÇîÉÇóÉîI=çïÉë=ãìÅÜ=çÑ=Üáë=éçéìä~êáíó=íç=
jêK=mìíáåI=~åÇ=íÜÉ=íïç=~êÉ=çÑíÉå=êÉÖ~êÇÉÇ=~ë=çåÉ=éçäáíáÅ~ä=ÉåíáíóK=eçï=Üáë=ïáää=
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ÅçãÄáåÉÇ=ïáíÜ=~=Äççëí=íç=íÜÉ=~ÅÅÉéí~åÅÉ=çÑ=tql=ãÉãÄÉêëÜáéI=ïÜáÅÜ=ëÉÉãë=íç=Ü~îÉ=
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How to read the chart?

Key ratios 2008 Moving out from the center
Resilience
12
reduces risk.
10
Population (mill) 141,8 8

6
GDP/capita ($) 1804
Macro balance 4
Liquidit
2
GDP/capita (US$) 12722 0

Inflation 13,4%

Curr.Acc.Balance/GDP 7,8%
Absence of
Information
Reserves/imports (months) 16 event risk

Investments/GDP 27,0% Russia Average EM

Government debt/GDP 4,7% Mexico

bñíÉêå~ä=ê~íáåÖëW= mÉÉêëW Graph: Russia's risk profile is "flat" with strengths on

cáíÅÜW===___H= jÉñáÅç= liquidity and macro balanc , but weaker on long term factors
pCmW==___H `Üáå~= including resilience . The steep oil price fall may pose a new
h~ò~âÜëí~å= threat to political stability, temporarily calmed by smooth
power transfer to a new President in March '08.
=
=
=

6
SEB Merchant Banking Country Risk Analysis October 20, 2008

Key data: 2003 2004 2005 2006 2007 2008 2009 2010
GDP (bill.US$) 432,6 591,8 763,2 990,9 1 294,3 1 755,6 2 007,0 2 376,4
GDP/capita (US$) 2975 4090 5302 6919 9083 12383 14228 16936
GDP (%chg) 8,2% 7,2% 6,4% 7,3% 8,1% 6,8% 4,8% 5,2%
Investments/GDP 18% 19% 20% 22% 25% 26% 26% 27%
Budget balance/GDP 1,4% 4,5% 7,7% 8,4% 6,1% 4,0% 1,0% 0,0%
Govt debt/GDP 32% 24% 16% 10% 7% 5% 5% 5%
CPI inflation (% chg) 13,7% 10,9% 12,7% 9,7% 9,0% 14,3% 10,7% 8,4%
Money demand (%chg) 47% 40% 36% 45% 50% 30% 30% 23%
Stock prices (%chg) 36% 33% 31% 92% 27%
Interest rates 16,5% 13,3% 12,8% 11,5% 10,1% 10,8% 10,4% 9,9%
Exch. Rate ($) 31 29 28 27 26 24 26 25
Trade/GDP (%) 49% 47% 48% 47% 45% 46% 39% 37%
Oil price (Brent) $29 $38 $54 $65 $73 $103 $65 $65
Millions US $
Export of goods 135 930 183 207 243 799 303 550 354 400 494 586 433 489 473 200
Imports of goods 76 069 97 382 125 433 164 280 223 485 308 012 355 255 404 155
Other: -24 451 -26 312 -33 958 -44 930 -54 675 -81 573 -66 768 -64 716
Current account ($ mill) 35 410 59 513 84 408 94 340 76 240 105 001 11 466 4 329
(% of GDP) 8,2% 10,1% 11,1% 9,5% 5,9% 6,0% 0,6% 0,2%
FDI -1 767 1 662 119 6 551 9 159 3 773 6 582 5 331
Loan repayments -10 898 -12 725 -32 487 -37 479 -27 759 -26 424 -23 855 -25 686
Net other capital flows -1 491 -15 386 7 187 32 332 95 547 61 033 56 692 50 076
Balance of payments 21 255 33 063 59 227 95 744 153 187 143 383 50 886 34 051
Reserves 60 997 94 060 153 287 249 031 402 218 545 601 596 487 630 538
Total debt 166 850 198 450 232 850 285 475 411 724 596 917 798 687 998 940
o/w short term debt 31 650 32 325 39 950 54 300 90 125 110 910 159 292 208 976
Source: OEF (Oxford Economic Forecasting) and SEB estimates.

Rating history
Fitch (eoy) B+ BB- BB+ BBB- BBB BBB+
S&P (eoy) B+ BB BB BB+ BBB BBB+
Type of government: Presidential democracy
Next elections Presidential elections 2012
Other:
Latest PC deal 1999/active
Latest IMF arrangements 1998/SBA
S p r e a d (E M B I) S to c k m a rk e t
900 2500

800 2250

700 2000

1750
600
Basis Points

1500
500
Index

1250
400
1000
300
750

200 500

100 250

0 0
03 04 05 06 07 08 01 02 03 04 05 06 07 08
R us s i a (b o tto m ) G lo b a l (to p )
S o u rc e : R e u te rs E c o W i n S o u rc e : R e u te rs E c o W i n

B a n k C re d it to P riv a te s e c to r In te rn a tio n a l R e s e rv e s
1 7,5
6 00
RUB (thousand billions)

1 5,0
5 00
1 2,5
4 00
USD (billions)

1 0,0

3 00
7,5

5,0
2 00

2,5 1 00

0,0 0
01 02 03 04 05 06 07 08 01 02 03 04 05 06 07 08
S o u rce : R e u te rs E co W i n S o u rc e : R e u te rs E c o W in
=
=
=
=
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7
SEB Merchant Banking Country Risk Analysis October 20, 2008

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