Russian central climate plan

Rysslandsfond rose steeply at the start of 2020, but the coronavirus outbreak in China hit the market and led to a sharp correction. Almost the entire gains for the year were wiped out and the fund closed the month 1.5 percent up.

The big Russian news in January was President Putin’s proposal for constitutional changes and a subsequent reformation of the government. Putin is proposing more power for the Duma, the Federation Council and the State Council, and less power for the president. For example, the Duma will have the right to appoint the prime minister. He also proposed a war on poverty and government support for families with more children. Prime Minister Medvedev immediately resigned and was replaced by the head of the tax authority, Mikhail Mishustin, who has a reputation as a competent and effective bureaucrat. These moves can be seen as a prelude to a possible power handover when Putin resigns as president.

Russia has approved a national climate action plan. This specifies the organisational and regulatory measures the country will take over the next three years, and is a sign that the Russians are starting to take climate change seriously.

European gas prices have fallen to their lowest levels since 2016 due to weakened demand following the mild winter. The low prices and even lower volumes will result in reduced profits for Gazprom.

The Russian economy is showing some strength. Russian industrial production rose 2.1% year on year in December, and retail sales showed growth of 2 %. It is also positive that real wage increases are an annualised 2.7 % and that inflation has now fallen to 3 %.

Russia’s population declined by 35,600 in 2019. This was slightly less than in 2018 but does not mean the trend has reversed. The authorities expect the negative track to accelerate.

The gold price has been strong recently, partly due to decreased risk appetite associated with the coronavirus. Both of the fund’s gold companies, Polymetal and Polyus, recently issued really strong reports.

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Carnegie Rysslandsfond invests in equities listed in Russia and in other parts of the former Sovjet Union. The region has great natural resources as well as many excitingcompanies in newer...

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