Economic Trends/Outlook in Russia

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Economic Overview

Russia was hit hard by the international financial crisis and in 2009 reached a record recession since the fall of the Soviet block (-7.9%). The recovery in 2010 was strong (4% growth according to estimates), driven by fuel exports and domestic demand stimulated by the increase in salaries. Growth should continue to strengthen in 2011-2012.

Economic recovery justifies the end of exceptional measures to combat the crisis. The government’s priority, announced as part of a Five Year Plan, is to support the agricultural sector in order to achieve food self-sufficiency. In order to free itself of its dependency on hydrocarbons, a change of the economic model is imperative. Tax reductions have been planned for the next few years, in order to favor the diversification of the economy through investment while, regaining some balance. A stabilization fund has been set up to modernize infrastructures, the education and health systems, as well as agriculture. Cuts in public spending and a strengthening of the supervision of the banking system are also planned. The main threats to growth are linked to controlling inflation, which remains high and in the long term, to the drop in population.

The unemployment rate, which dropped in the recent years, has risen as an effect of the crisis and is now estimated at 7.5% for 2010. Disparities are still marked, particularly between big cities and rural areas. Despite the appearance in towns of a middle class, the poverty rate is still at 16%.

Main Indicators 2009 2010 2011 2012 2013
GDP (billions USD) 1,222.33e 1,465.08e 1,894.47e 2,197.71e 2,403.03e
GDP (Constant Prices, Annual % Change) -7.8e 4.0e 4.8e 4.5e 4.3e
GDP per Capita (USD) 8,614e 10,437e 13,543e 15,765e 17,296e
General Government Balance (in % of GDP) -3.5 -1.8e -0.6e -1.3e -1.7e
General Government Gross Debt (in % of GDP) 11.0 9.9e 8.5e 8.8e 9.5e
Inflation Rate (%) 11.7 6.9e 9.3e 8.0e 7.1e
Unemployment Rate (% of the Labor Force) 8.4 7.5e 7.3e 7.1e 7.0e
Current Account (billions USD) 47.51e 77.57e 80.34e 69.54e -
Current Account (in % of GDP) 3.9e 5.1e 4.6e 3.5e -

Source: IMF - World Economic Outlook Database

Note: (e) Estimated Data


Main Sectors of Industry

Russia has a wealth of natural resources. It is the leading producer of natural gas and the second producer of oil in the world, as well as being one of the main producers and exporters of diamonds, nickel and platinum.
Despite its surface area, Russia has a relatively small amount of land suitable for agriculture because of unfavorable climatic conditions. The country nevertheless owns 10% of the global agricultural lands. The northern regions of the country concentrate mainly on livestock and the southern regions as well as western Siberia produce cereals.
Industry represents more than a third of Russia's GDP and employs up to 30% of the population. The country inherited most of the Soviet Union's industrial bases. The most well developed sectors are chemicals, metallurgy, mechanical construction and defense sectors.
The service sector employs more than 60% of the population and generates slightly under 60% of the GDP. After the 1998 financial crises, the banking sector has not yet undergone a complete restructuring. Given the size of the country, the transport, communications and also trade sectors are particularly significant.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 9.0 29.2 61.8
Value Added (in % of GDP) 4.7 32.8 62.5
Value Added (Annual % Change) 0.2 -10.8 -5.4

Source: World Bank - Last Available Data.

For more detailed background on Industries in Russia, click here.

Indicator of Economic Freedom

Mostly unfree
World Rank:
Regional Rank:

Distribution of Economic freedom in the world
Source: 2011 Index of Economic freedom, Heritage Foundation


Country Risk

See the Country Risk Analysis Provided By Ducroire.


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