EDB investment portfolio


60 projects

$3 155.3 million

42.4% of the total

Russia is a founder and the largest member of Eurasian Development Bank, holding two thirds of its charter capital (US $1 billion).



Russia’s economic growth in 2Q 2018, according to preliminary Rosstat estimates, was 1.8% compared with the same period previous year, after an increase of 1.3% a quarter earlier. Consumer demand was one of the main drivers of growth.

Increased consumer activity was driven by the positive growth in real income seen since the beginning of 2018.

In 2Q 2018, real income exceeded the level of 2Q of last year by 2%, while the increase in real wages for the same period amounted to 7.4%. In 2Q, consumer lending also expanded. Banks claims on households in 2Q increased by 5.3%, or RUR 729 billion, and on July 1, 2018 amounted to RUR 14.4 trillion, which is 18.5% higher than the same period of previous year.

The turnover of retail trade in 2Q exceeded the level of the same period of last year by 2.7%. The largest volume increases occurred in June, when the World Cup provided an additional stimulus. According to Central Bank estimates, the championship provided a positive contribution to the annual rate of GDP growth of 0.1–0.2 p.p.

Industrial production stats in 2Q improved considerably, in particular after the Rosstat data for the period from 2017 to the beginning of 2018 was revised. Most of the major manufacturing industries in 2Q showed growth in volumes, though metallurgy was an exception, with the largest production decline for many years at 14.2% YoY in June. A revision in June of the OPEC+ agreement’s conditions and a gradual increase in oil production had already had a positive impact on extractive industry trends by the end of 2Q, which we expect to continue in the second half of the year.

More moderate optimism about the development of industrial production in 3Q has been incorporated into the leading indicators. The July PMI for the manufacturing industries indicates the most significant deterioration in the market environment since April 2016.

Agricultural output continues to exceed the level of the same period of last year (an increase of 1.9% YoY in 2Q compared with 0.1% YoY a year earlier), however, the growth rate is slowing down. In second half of 2018, the slowing trend is expected to continue, given the record harvest last year.

International rating agency S&P confirmed Russia’s sovereign rating at “BBB-“ with a stable outlook. At the same time, information about a possible upgrade of the rating was a positive signal from the agency. 


Annual inflation in 2Q was at a low level and amounted to 2.3% in June. The main pressure on general price levels was derived from non-food products and, to a greater extent, gasoline prices, which were boosted by the growth of excise taxes and world oil prices. The slowdown in the growth of prices for food products against a backdrop of an increase in the supply of fruit and vegetable products restrained inflation.

Inflationary expectations stabilized and became less sensitive to short-term factors, but they remain above actual inflation (according to the Central Bank of Russia, the household’s inflationary expectations in July were 9.7%).

The main inflationary risks include geopolitical factors and the growth in volatility on the foreign exchange market observed in August. However, judging by consumer prices’ limited reaction to the depreciation of the ruble in April this year, the exchange-rate pass-through effect in 3Q may be rather restrained. 

External sector

After sharp depreciation in the Russian ruble exchange rate at the beginning of 2Q 2018 against a backdrop of a new round of US sanctions, a period of stabilization of the Russian currency followed. The effect on the ruble and financial markets was largely mitigated by high oil prices. In 2Q, the depreciation of the real effective ruble exchange rate was 5.3% compared with the previous quarter, while the nominal rate to the US dollar depreciated by 7.9% over the same period.

External conditions worsened further and pressure on the Russian ruble grew in the first half of August, when the nominal exchange rate of the ruble against the US dollar depreciated to the worst level over the past two years and exceeded 68 rubles per US dollar. According to our estimates, after the change in the exchange rate at the beginning of 3Q the undervaluation of the real ruble exchange rate against the US dollar was about 8%. In order to neutralize the weakening of the Russian currency, the Central Bank of Russia suspended purchases of currency for the Ministry of Finance in August.

Despite the change in external conditions and the expansion of sanctions, the net capital outflow, according to the Bank of Russia, fell in 2Q to USD 0.4 billion, after USD 17 billion in the previous quarter. One of the determining factors was the reduction of banks’ foreign assets, with a continuing decline in liabilities to nonresidents.

Favorable price conditions for Russia’s main export goods continued to contribute to the expansion of the trade balance, which in 2Q amounted to USD 46 billion (USD 90.6 billion since the beginning of 2018), which is the highest value since 2014. 

Fiscal Policy

According to the preliminary estimate of the Ministry of Finance, the federal budget surplus for 1H 2018 increased to RUR 948 billion, or 2% of GDP (compared with a deficit of RUR 408 billion a year earlier). While expenditure has been maintained at a level close to last year’s, there has been a significant increase in budget revenues (21% compared with January-June 2017), a key factor in which was the growth of oil and gas revenues (36.2% YoY), against a backdrop of a continuing favorable price environment for energy. Positive trends in the first half of the year increased the probability of the surplus planned for the year exceeding RUR 449.6 billion.

A key benchmark in budget expenditures in the medium term is the Russian president’s new May decree on the development of the Russian economy through to 2024. Additional budgetary expenses for fulfilling the decree may amount to about RUR 8 trillion by 2024. One of the sources for financing the costs will be an increase in the VAT rate from 18% to 20% from 2019. The corresponding bill was approved by the State Duma, and its implementation, according to estimates of the Ministry of Finance, will lead to additional budget revenues of more than RUR 600 billion a year. However, in the short term this measure will also be accompanied by an increase in inflation. A planned increase in excise rates should serve as another source of additional revenue for the Russian Federation.

Monetary Policy

The decline in the key rate was suspended in 2Q 2018 after its decrease from September 2017 to March 2018 to the level of 7.25%. The reason behind this decision was uncertainty about the impact of the evolving external conditions in 2Q on inflation and the impact of fiscal decisions that had been adopted (the VAT increase starting from 2019) on inflation expectations in the current year. The weakening of the ruble exchange rate observed in August may also have led to the regulator’s tough rhetoric about further lowering of the key rate.

10 October 2018
The respective agreement was signed by Andrey Beliyaninov, Chairman of the Management Board at the Eurasian Development Bank, and Dmitry Mironov, Governor of Yaroslavl Region
06 August 2018
The net profits of the Eurasian Development Bank (EDB) amounted to US $37.542 million in the first half of 2018, while the target fixed in the bank's strategy until 2022 for the whole year is at US $32 million
25 July 2018
The EDB announces the completion of the technical issue of 001P-01 bond of the nominal value of RUB 10 billion at the Moscow Stock Exchange under the programme (identification number 4-00002-L-001P-02E of 14 June 2018). The coupon rate is 7.60% per annum, the yield is 7.74%. The bond maturity is 1.5 years
19 July 2018
The Council of the Eurasian Fund for Stabilization and Development (EFSD), based on the outcomes of voting by correspondence, has approved the EFSD Annual Report 2017. The EFSD Annual report includes information on the activities undertaken by the Eurasian Development Bank in its capacity of the EFSD Resources Manager and related to manging and administering the EFSD resources in 2017
17 July 2018
Andrey Beliyaninov, Chairman of the Management Board of the Eurasian Development Bank, will talk at the Financing the Real Sector of the Economy Business Forum to take place on 19 July in Moscow
16 July 2018
Applications are invited for enrolment to the International Eurasian Integration School 2018 titled The Eurasian Economic Union: Contouring the Future. The school has been launched by the Russian International Affairs Council, the Alexander Gorchakov Public Diplomacy Fund, the Eurasian Economic Commission, and the Eurasian Development Bank
25 June 2018
The Council of the Eurasian Development Bank (EDB) approved the Bank’s new mid-term strategy for 2018-2022. The meeting was chaired by Bakytzhan Sagintayev, Prime Minister of the Republic of Kazakhstan and Chair of the EDB Council
04 June 2018
The Eurasian Development Bank’s (EDB) delegation headed by Andrey Beliyaninov, Chairman of the Management Board, took part in the Third Annual Meeting of the New Development Bank (NDB) in Shanghai on 28-29 May
29 May 2018
In Q1 2018, multilateral development banks (MDB) approved finance for CIS investment projects for a total of US $2 billion, with sovereign finance accounting for 54% and the private sector 46%
26 May 2018
The Eurasian Development Bank (EDB) and the Big Asia TV channel launch continuous long-term cooperation. The respective memorandum was signed at the St. Petersburg International Economic Forum by Andrey Krainiy, State Secretary at the EDB, and Alexander Lebedev, General Director of the media holding

St. Petersburg Branch

7 Paradnaya St., Saint Petersburg, 191014, Russian Federation

Moscow Representative Office

1-st Zachatievskiy pereulok, house 3, block 1, Moscow, 119034, Russian Federation

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