IT’S been a tough couple of years for Vladimir Miroshnikov, head of business development at Rolf, one of Russia’s biggest car dealerships. But like many foreign investors, he’s banking on an economic turnaround in 2017.

    Russian car sales, once growing around 50 percent a year, dropped off a cliff in 2015 after the rouble’s 2014 collapse and fell a further 10 percent in 2016.

    Miroshnikov remains cautious, saying the next few months will be tough and seeing the possibility of “a recovery only in the second half of 2017.” However, he said he expects sales will at least stop falling over the year as a whole.

    Foreign investors are more enthusiastic in hoping for a revival in economic growth and consumer demand after two years of recession. Even after roughly 50 percent gains on Russian stocks and rouble bonds in 2016, analysts and fund managers interviewed remain almost unanimously bullish on the country.

    Russia figures among the top 2017 trades for Deutsche Bank, Goldman Sachs, UBS, JPMorgan, Rabobank and Bank of America Merrill Lynch among others, with Goldman predicting it “to move from a recovery to a growth phase.”

    On the face of it, the stars do seem aligned for Russia.

    Data showed manufacturing expanding in December at its fastest pace since March 2011, a signal that the economy is starting to grow again.

    Prices for oil, its lifeblood, will average US$57 a barrel, according to analysts’ forecasts in Reuters polls, US$10 higher than in 2016. And if the central bank brings inflation down to its 4 percent target, ordinary Russians should have more money to spend.

    Two other factors have added impetus to the trade.

    First, Republican Donald Trump won U.S. elections Nov. 8 with a promise to improve ties with Russia, holding out the possibility of easing sanctions imposed after Moscow’s 2014 annexation of Crimea from Ukraine.

    And Dec. 7, Glencore and Qatar teamed up to pay US$11 billion for a stake in Russian state oil firm Rosneft, confirming Russia’s allure for international investors.

    Some are confident that the sanctions, tightened over Russia’s role in a separatist rebellion in eastern Ukraine, will go after the new U.S. administration takes over.

    “I like Russia for some very simple reasons: The most obvious reason is Trump, because sanctions will be lifted,” said Luca Paolini, chief strategist at Pictet Asset Management.

    “But it is a little more complicated than that. It is one of the few emerging markets where we feel it is cyclical...where we think there is some decent potential in almost every scenario.” (SD-Agencies)