Moody’s Outlines Russia’s Role in Global Economy

By Staff, Agencies

Russia’s economic pull in the Eurasian Economic Union [EEU] remains strong despite geopolitical tensions and Western sanctions, according to Moody’s. The rating agency, however, noted that growing uncertainty is undermining Moscow’s role as a major diplomatic player and economic hub.

According to the report, the conflict in Ukraine has led Central Asian countries to reassess their trade routes, export markets, and investment sources, as they seek to diversify. This could boost regional economic growth and transform labor markets, Moody’s wrote. The conflict has repercussions on the world stage, especially in the ex-Soviet Commonwealth of Independent States [CIS] nations, it added.

The report predicted that increased cooperation and infrastructure development between Central Asian countries will diminish Russia’s central role, as more diverse regional trade routes emerge as alternatives to the historical “hub and spoke” model that links Moscow to the former Soviet republics.

“We expect Russia's diminishing power on the world stage to reshape geopolitical alliances in the CIS, particularly in Central Asia. China, the US, the EU, but also Turkey and Iran, will play an increasingly prominent role,” Moody’s stated.

At the same time, trade between Russia and Central Asia has continued to rise, jumping by 28% in 2022 year-on-year, Moody’s said. The report indicated that economic cooperation has been growing within the Russia-led free trade zone.