Burkhard Varnholt, the global deputy chief investment officer (CIO) of the Credit Suisse banking company and CIO of Swiss Universal Bank, told Sputnik that the Russian stock market was showing good results despite many external factors and that there was a significant potential for the country's economic growth in the foreseeable future
MOSCOW (Pakistan Point News / Sputnik - 12th December, 2019) Burkhard Varnholt, the global deputy chief investment officer (CIO) of the Credit Suisse banking company and CIO of Swiss Universal Bank, told Sputnik that the Russian stock market was showing good results despite many external factors and that there was a significant potential for the country's economic growth in the foreseeable future.
"The Russian stock market is showing the best results in the world. How can the country with such a stock market not be interesting? We see a high potential for the Russian economy's growth. But if we're talking about the GDP growth rate, it is always relative. If we're looking at GDP per capita, there is such a high potential for growth that I think it's a matter of taking the situation under control and achieving the goal," Varnholt said in response to a question on whether the Russian market was attractive for foreign investors.
The CIO added that economic growth could be accelerated further by boosting competitiveness. According to Varnholt, Russia has valuable and attractive resources in terms of a "well-educated and capable working population, a relatively low cost of labor, energy resources" and real estate that can attract foreign investors.
Among the most promising sectors in the Russian economy, the senior manager highlighted telecommunications, banking, financial services and energy.
Speaking on the development of high technologies and the rise of artificial intelligence (AI) both in Russia and worldwide, Varnholt said that its role was overstressed, however, it could serve benefits in some areas of life.
"The artificial intelligence is on everybody's A-list. Sometimes its importance is exaggerated, and I would not want it to distract people. A computer isn't an intelligence in itself, so the need for humans will remain. Russia is known for its IT professionals. AI is engaged in patterns' identification and optimization, which is very important in certain spheres like healthcare because it can help in diagnostics. Russia has historically been famous for the development of exact sciences, it should use this advantage," the Swiss Universal Bank's CIO told Sputnik.
Varnholt added that the main trends in the global economy next year would be technological rather than geopolitical and that traditional business would become more digitized.
Commenting on the external geopolitical factors that could impact not only Russia's economy, but that of other countries as well, Varnholt affirmed that neither the US-China trade wars nor Brexit posed any major risks.
"I think that it won't affect Russia more than other countries, I wouldn't focus on this. We cannot use these factors as an excuse for the things that are going worse than we want them to. There's always something that's going good and something's not. The first phase of the [US-China] trade war is coming to an end at this moment. ... The Brexit will come to an end next year, or perhaps, this year. But we'll get over it," the top manager stated.
Responding to a question on whether global economies would be facing a new crisis in 2020, Varnholt said that the risks were minor.
"In our opinion, there is a low probability that the global recession and the recession in the USA will occur in 2020," he said.
At the same time, the CIO warned of the decline in industrial production, a trend that has been especially obvious within the European Union, particularly in Germany.
"Germany is 'the world's Detroit.' The German auto industry was experiencing a Golden age for the past five years because one day the country discovered the Chinese market. Then, one morning they woke up and realized that the Chinese car industry market was already saturated," Varnholt noted.
The official added that this sector of the German economy was sustainable and that it still had good chances of recovering.
In the overall forecast for the Russian economy in 2020, Varnholt said that the financial situation looked positive, with a promising stable growth of 2-3 percent. However, it depended on global oil prices.
"We don't predict a sharp turnaround in prices until the end of the year unless there is an escalation of conflict in the Middle East," the top manager said.
The situation in the Middle East has been especially precarious over the past several months, with instability mainly stemming from the standoff between Iran and the United States, as well as the situation in Syria.
