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Swedish companies in Russia are planning to grow

Despite sanctions and political turmoil, 63 percent of Swedish companies active in Russia are planning to expand operations. This is revealed in Business Sweden’s Business Climate Study, which was presented in the seminar “To stay, grow or exit” on 5th of May in Stockholm.

The study notes that the business climate is challenging, however profitability and growth potential remains high. As many as 84 percent of companies surveyed believe that Sweden has a positive or very positive brand image in Sweden.   

-       The conclusion is that Sweden is a strong trading partner despite political unrest, says Andreas Giallourakis, Head of Business Sweden in Moscow.

At the seminar, renowned economist, Edward Lucas (The Economist, Veronika Bard-Bringéus (Ambassador of Sweden in Russia) and Bo Kragh (Swedish Handelsbanken) also participated.

Edward Lucas painted a grim picture of Russia’s development and the subsequent consequences on the security situation, particularly in Europe and Sweden. According to Lucas there are three conceivable scenarios:

  1. Friction. The situation will remain as it is today, which is the best scenario, Lucas argues.
  2. Escalation. The political and economic situation deteriorates and the ties with the West are severed.
  3. Disintegration of the Russian Federation. Putin fails and someone else takes over

Veronica Bard-Bringéus emphasised the importance of economic reforms aimed at stimulating economic growth in the country. The objective is an average growth of 6-7 percent annually, although current forecast estimates growth to stay below 2.5 percent in the coming years. This is partially a result of Western sanctions; however corruption and increased military expenditure also play a part. Regardless off the increased propaganda towards the West, about 70 percent of Russians view Sweden favourably.  

Bo Kragh talked about the sanctions and contra-sanctions and its effect on Russia. The conclusion is that Russia is facing huge problems and the disorder in Ukraine “will drag Russia along”.

The Business Climate Study was performed in March and April 2015. Respondents are top management and regional management in 73 different Swedish companies, varying in size, from different sectors, that all are operating in the Russian market. 

08 May 2015