The current investment boom is transforming the country's stagnating industry and putting the country's economic growth on the right track.

Russia is enjoying its longest period of sustained growth for de cades. The growth is no longer driven by traditional oil and gas industries. Economic growth hit a six-year high of 7.9% Year-on-Year (YoY) in the first quarter fueled by strong growth in construction manufacturing and trade. The ongoing investment boom is powering the economic growth. For instance according to estimates from the Ministry of Economic Development and Trade fixed capital investment soared by 20.1% YoY in January-March 2007 compared with just 5.7% growth during the same period in the previous year.

Besides buoyant household consumption also played a stronger role and is proving to be a boon for a number of manufacturing sectors. Other sectors such as telecommunications restaurants food processing and real estate are also booming. The consumers are eager to spend on a variety of consumer goods. Almost all the sectors are benefitting from the nation's consumer sector boom. Earlier many Russians were considered poor by Western standards.

However for years the economy's mainstay—the oil and gas industry— has been struggling. Against such weak performance from oil and gas economists question whether this pace of GDP growth can be sustained. They say "Faster economic growth is unlikely while energy output growth remains sluggish and while Russia's large-scale investment needs are not even now being fully met." On the other hand a range of problems in the business environment including the currency appreciation is eroding the country's competitiveness and this in turn is acting as a further obstacle in the path of Russia's economy.

The Analyst Magazine, Russian Economy, Economists, Gross Domestic Products, GDP, Business Environmentc, Russian Banking Sectors, Russian Banking System, Public-Private Partnerships, Special Economic Zones, SEZs, Foreign Direct Investments, FDI, Information and Communication Technology.