Putin 4.0: update or upgrade


The presidential election will be held in Russia on 18 March and, in our view, it is almost certain that Vladimir Putin will win in the first round.

If he does, we believe Russia’s current prudent approach towards the macroeconomic policy, which was set during his presidency, should continue. This includes: a relatively conservative fiscal policy; excess revenues from oil taxes being accumulated in reserve funds; the continued independence of the central bank; and maintaining the current inflation targeting policy.

We believe that political stability and holding to the current macroeconomic policy should limit the downside for the equity market from unfavourable events, such as money printing, capital controls etc. A gradual easing of monetary policy, which is expected to be continued, should imply higher valuation multiples for Russian equities, all else being equal.

Overall, we expect Mr Putin to continue playing a leading role in Russian politics after the 2024 presidential election (he will not be able to participate in them due to constitutional rules), as indicated by his high electoral rating and his influence on his affiliates’ election results.