East Capital’s Marcus Svedberg comments on Russian Elections

Marcus Svedberg, chief economist at East Capital, which specialises in Emerging Europe, Russia and Turkey, has commented on the Russian elections – where final vote counting is yet to be announced.

The ruling United Russia won the parliamentary elections as expected on 4 December, but they seem to have lost a lot of votes. Exit polls suggest that they only received 48.5% of the votes, which is significantly below the 64.3% they received in the previous election. Voter turnout was high and lots of people have been expressing their frustration with the ruling elite through different channels.

It seems like both the Communists and the right-wing nationalist LDPR did better than expected by receiving 19.8% and 11.4% of the votes, according to exit polls, which is significantly better than the 11.6% and 8.1% they got in 2007. But the fact that a Just Russia, which originally was created as a fake competition to United Russia, received 12.8% of the votes, up from 7.7% in 2007, was a big surprise since they were more or less written off a few months ago.

The actual numbers may be changed when the official results are announced and United Russia will probably get their own majority since the votes cast for parties not passing the 7% threshold will be distributed proportionally to the four parties that passed the bar. My guess is that United Russia and Just Russia together will get more than 300 seats, which translates into a two thirds constitutional majority.

United Russia should in any case be able to continue to rule but the election results show that the electorate is growing increasingly impatient and frustrated with the ruling elite.


For further views from Marcus Svedberg on CEE investments, particularly prices of equity and bond assets, click here

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