Consumer Spending is Expected to Cool in Russias Pharmaceuticals & Healthcare Sector

14 October 2013


Business Monitor examines key issues affecting the Pharmaceuticals and healthcare industry in Russia and provides short- and long-term forecasts for the sector.

(PRWEB UK) 10 October 2013

Business Monitor has just released its latest findings on Russia’s risky but attractive pharmaceuticals and healthcare sector in its newly-published Russia Pharmaceuticals and Healthcare Report.

Business Monitor’s newly published report identifies Russia's pharmaceutical market as continuing to be one of the most attractive in the Emerging Europe region, primarily due to its sheer market size, growing economy and increasing government investment in healthcare. Key drivers of growth for pharmaceuticals include programmes to fund medicines for specific segments and disease groups, as well as a pledged universal medicines insurance system due to be put into place later in the decade. Business Monitor predict that Russia's recent World Trade Organization accession should drive improvements in the country's intellectual property (IP) environment, and enforcement in particular, which has been conspicuously lacking. However, in the short term, a deteriorating macroeconomic picture will serve to moderate growth as consumer spending is expected to cool. They predict that over the longer term, the country's ageing population and significant disease burden will accelerate pharmaceutical expenditure.

Headline Expenditure Projections: 

+11.0% in local currency terms and 9.3% in US dollar terms.

+12.1% in local currency terms and +10.4% in US dollar terms.

Risk/Reward Ratings:

Russia has an RRR score of 60.4 out of 100, making it the second-most attractive pharmaceutical market in Emerging Europe. Although Russia scores the highest in Business Monitor’s ratings for industry rewards, its overall score is moderated by its lower risk score. This highlights the challenging operating environment in the country at present and the impact of the move towards protectionist measures. On the other hand, the upcoming rollout of national drug insurance promises to sustain the rapid growth seen in Russia's pharmaceutical market.

Key Trends and Developments:

BMI Economic View:

Business have revised down their forecast for real GDP growth from 2.6% previously to 2.3% in 2013 and from 3.8% to 3.5%, on the back of a lacklustre investment growth, which has prompted them to revise down their forecast for gross fixed capital formation. At the same time, although private consumption posted a robust growth figure in Q113, they hold to their view that it will slow down over the next two years. Tighter credit conditions will limit the ability of households to spend, a trend which is already visible in the precipitous decline in car sales in Q213.

Business Monitor is a leading, independent provider of proprietary data, analysis, ratings, rankings and forecasts covering 195 countries and 24 industry sectors. It offers a comprehensive range of products and services designed to help senior executives, analysts and researchers assess and better manage operating risks, and exploit business opportunities.




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