Coming up Trumps

By The Economist online

THOUGH many outside America are dismayed at the prospect of Donald Trump as president, not everyone is despondent. When the news of Mr Trump’s victory reached the floor of the Duma, Russia’s lower house of parliament, the assembled politicians burst into applause. Such enthusiasm in Russia is in part a reflection of the bromance between Mr Trump and Vladimir Putin, Russia’s president. But it is also because Russia may be one of the few economies that might benefit from—or at least, be indifferent to—a Trump presidency.

It helps that Russia’s economy has endured a rough time recently and that some kind of rebound is probably due. Its GDP fell by 3.7% last year and will shrink again this year, according to the IMF. Russia has one of the cheapest currencies in The Economist‘s Big Mac Index, which compares the relative cost of burgers across the globe. By this measure, the rouble is around 60% undervalued against the dollar. Inflation, which rose to over 16% in early 2015 after a big fall in the rouble, has fallen to around 6%. That has allowed Russia’s central bank gradually to reduce interest rates from a peak of 17% to 10%. Mr…

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Category: Business and finance, Approved, Finance and economics, FINANCE

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