President Vladimir Putin’s United Russia party won the majority of the votes in the parliamentary elections. The elections were marked by low turnout. Unlike in 2011, no protests arose after the elections.

Impact on country risk

The strong representation of President Putin’s party in the Duma, more than the two-third majority needed to change the constitution, means that he can count on the support of parliament ahead of the 2018 presidential election. Hence, political continuity is assured and cover policy remains unchanged. The Duma is thus likely to easily approve the budget for 2017. New spending cuts are likely to be announced, which could weigh on Vladimir Putin’s approval rating. Even if GDP growth is likely to recover slightly next year, the government will probably continue to struggle to finance its deficit in a context of low oil prices – a key source of public revenues – fast-decreasing wealth fund assets and Western sanctions limiting access to the financial market, even if Russia successfully issued a USD 1.5 bn Eurobond in September this year. In this context, the government may resume the privatisation plan. Last but not least, despite deterioration, central government finances remain sound with a central government debt ratio of less than 20% of GDP.

Analyst: Pascaline della Faille, p.dellafaille@credendogroup.com