Russia ranks second in Bloomberg’s new ranking of 17 “emerging market standouts that could beat expectations next year.” Thailand tops the list, owing to its solid reserves and high potential for portfolio inflows.

The ranking is based on 11 economic and financial performance indicators including the extent of COVID-19 lockdowns; the size of external reserves relative to liabilities; the state of the current account; and the debt-to-GDP ratio.

The USRBC quoted Bloomberg as saying Russia’s high position in the ranking was mostly due to its large foreign reserves, “a strong fiscal profile,” and an undervalued ruble.

Bloomberg said emerging economies that have contained the spread of COVID-19, provided large stimulus, have low exposure to the hardest-hit sectors, and are not reliant on foreign capital “will fare better” in 2021. Russia has attributed its limited economic losses from the pandemic to a relatively small share of SMEs and the services sector in GDP.

Bloomberg also noted that, while large foreign reserves can protect emerging economies from external shocks, “elevated debt-to-GDP readings” may signal “stability risks.” Some economists expect Russia’s government debt to increase from the currently estimated 14% of GDP as the government may boost its borrowing next year to cover budget shortfalls.

Bloomberg observed that, while most emerging economies stand to gain from a global post-pandemic recovery, “structural weaknesses that worsened during the pandemic” may pose risks to some emerging markets.