By DPA
Berlin : German companies are planning to invest more than one billion euros ($1.44 billion) in Russia’s booming economy next year, a survey released Thursday showed.
“The mood among German companies in Russia is very optimistic,” said Klaus Mangold, chairman of the so-called Eastern European Committee of German Industry, releasing a survey of German business in Russia.
More than three quarters of the companies responding to the survey found economic conditions in Russia to be good to very good with economists expecting the Russian economy to turn in another strong performance in 2008.
“Seven out of 10 companies are of the view that the economic climate in Russia has improved with about 80 percent believing that the current positive mood will continue in the next few years,” said Mangold.
After growing at about 7.5 percent this year, the Russian economy is expected to expand by more than 6.0 percent next year as well as in 2009 with the easing up in growth coming in the wake of a slowing world economy.
Russia’s strong demand for infrastructure has been a key factor in helping to support Germany’s export machine.
In the months between January and October this year, German exports to Russia increased by 28 percent year on year with Germany becoming Russia’s largest trading partner in Europe.
This was more than double the growth rate for total German exports during the period.
As part of efforts to boost trade between Russia and Europe’s biggest economy, the Russian-German Chamber of Commerce was opened in Moscow last week.
German direct investment in Russia currently stands at about 11 billion euros after major expansions in Russia this year by German corporate giants such as energy group E.ON AG and carmaker Volkswagen AG.
In particular, the increasing purchasing power of Russian consumers and the nation’s highly skilled workforce have been key factors behind German business interest in investing in Russia, Mangold said.
The German companies operating in Russia also expect further moves from Moscow to reduce red tape and to combat corruption as well as support for building up the Russian small-to-medium size business sector, the survey showed.
A majority of those surveyed, also said they did not expect any economic fallout from Moscow’s controversial new law on foreign investment in strategic sectors.