Putin return may hurt Russia's growth: S&P

27th September 2011, Comments 0 comments

Standard and Poor's said Tuesday that Vladimir Putin's move back into the presidency may hurt Russia's long-term growth outlook while the exit of finance minister Alexei Kudrin could harm public finances.

"We currently expect no significant departure from current economic and fiscal policies and expect Russian state capitalism and the close links between politics and business to remain unchanged," the global ratings agency said in a statement.

But it added: "We think, however, that the change in roles and personnel could make it more difficult for Russia to deal with such challenges as strengthening the country's long-term growth potential by improving the business environment, competition and the productive infrastructure."

Putin headed the Kremlin in 2000-2008 and was widely regarded as Russia's paramount leader while serving as prime minister under President Dmitry Medvedev for the past three years.

The two announced a carefully-arranged job swap over the weekend that should see Medvedev become prime minister after Putin's expected win in March presidential elections.

Putin's return may keep the former Soviet intelligence agent in power through 2024, making him the country's longest-serving leader since Joseph Stalin.

S&P particularly noted the negative implications of Monday's dismissal of Kudrin -- an 11-year veteran who developed a stellar reputation among Western investors for his tight hold on Russia's purse strings.

"Efforts to consolidate public finances, following strong expansionary measures during the recent economic crisis, could be complicated by Mr Kudrin's dismissal," the ratings agency said.

S&P said it was keeping the stable outlook on Russia with a BBB foreign currency and BBB+ local currency ratings it assigned the country on August 31.

© 2011 AFP

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