German firms in no rush to leave Russia – envoy

Russia continues to be an attractive market for foreign companies, Moscow's ambassador to Germany says

The Russian economy has proven resilient despite sanctions, and German businesses are reluctant to leave the market despite pressure from the government in Berlin, Russia’s ambassador to Germany said in an interview with the news website Lenta.ru, published last week.

According to Sergey Nechayev, the German economy has entered a phase of technical recession and its economic outlook is “depressing.” GDP fell 0.3% in the first quarter of 2023, after a 0.5% contraction in the last quarter of 2022.

“On the contrary, the Russian economy, which has been hit by unprecedented Western sanctions, is demonstrating stability and growth. German economic operators see this and, despite enormous political pressure, are in no hurry to cut ties with the Russian market,” Nechayev stated. Russian GDP rose by 0.5% in the first five months of this year, and is expected to gain more than 2% by the end of 2023.

Nechayev noted that Russia continues to advocate “pragmatism, equal and mutually beneficial partnerships” in its dealings with foreign partners.

“Our doors are open to those who adhere to similar principles. To those who left, we say: if there is a gap, something will fill it. But it will be much harder to return to our market than to leave it,” the diplomat warned.

READ MORE: Russian economy recovering faster than we expected – Putin  

A number of Western companies, including German insurance giant Allianz and carmaker Volkswagen, announced their intention to leave the Russian market amid Western sanctions that came in response to Russia’s military operation in Ukraine. Most cited deteriorating business conditions as the reason for withdrawing.

However, according to the Kiev School of Economics tracker, only about 10% of foreign firms with subsidiaries in the country have actually left so far.

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