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Russian economic survey

Articles about business in Russia

Possibilities and Challenges of Business in Russia (Microsoft Word, 2 MB)

Assisting companies in risk management during the crisis period (Microsoft Word, 400 KB)

Establishing business in Russia (PDF, 1 Mb)

Since the collapse of the Former Soviet Union Russia has undergone important changes moving from a globally-isolated economy to a more market-based economy. As a result of the reforms of the 1990s industrial capital became mostly privatized. The protection of property rights is still on the agenda and the private sector remains subject to the government interference. Russian industry is rather fluctuating having globally -competitive producers - nowadays the country is the world's largest exporter of natural gas, the second largest exporter of oil, and the third largest exporter of steel and primary aluminum - as well as other less competitive heavy industries that are dependent on the Russian domestic market. Since 2007 the Government has embarked on an ambitious program to reduce this dependency and build up the country's high technology sectors, still with a few results so far. After the financial crisis of 1998 in Russia the economy has averaged 7% growth which resulted in doubling of actual disposable incomes and the forthcoming of a middle class.

The Russian economy was tremendously hit by the 2008 global economic crisis due to the sudden decrease of the prices on oil and foreign credits that Russian banks and companies dried up. After 2008 economics downfall and its stabilization in 2009, the year of 2010 was supposed to be a year of recovery and even at the end of the first half it seemed that all the optimistic forecasts were consistent: GDP grew by 5.2%, industrial production commended optimistic 10.3% growth. For the second half of 2010 government and economists forecasted strong economical growth backed by household consumption growth, FDI inflow and favorable foreign economics environment. In 2011, Russia became the world's leading oil producer, surpassing Saudi Arabia; Russia is the second-largest producer of natural gas; Russia holds the world's largest natural gas reserves, the second-largest coal reserves, and the eighth-largest crude oil reserves.

Furthermore, drought and fires in central Russia reduced agricultural output and slowed growth in other sectors such as manufacturing and retail trade. Russia's long-term challenges are foreseen to include shrinking workforce, a high level of corruption, difficulty in accessing capital for smaller non-energy companies, and poor infrastructure in need of large investments.

Along with the collaboration upon the institutional changes that are solely dependant on governmental policy, the government is highly involved in local projects that work on Russia's international image (like Skolkovo, 2014 Olympics, 2018 World Cup, Formula 1 Grand Prix in Sochi). In the scope of upcoming 2011 Parliament and 2012 Presidential elections the Government will be concerned on extra increase of social expenditures in addition to budgeted projects and increased military expenditures.

The recovery of the Russian economics is in the process that can be estimated in the following facts:

GDP (purchasing power parity):

USD 2.373 trillion (2011) - country comparison to the world: 7

USD 2.229 trillion (2010)

USD 2.147 trillion (2009)

USD 2.331 trillion (2008)

GDP (by sector)

agriculture: 4.2%

industry: 37%

services: 58.9% (2011)

Labor force (by occupation in sectors)

agriculture: 9.8%

industry: 27.5%

services: 62.7% (2011)

Unemployment rate

6.8% (2011) - country comparison to the world: 71

7.6% (2010) - country comparison to the world: 83

Investment (gross fixed):

21.1% of GDP (2011)

18.9% of GDP (2009)

Public debt

8.7% of GDP (2011) - country comparison to the world: 125

9.5% of GDP (2010)  

Inflation rate (consumers prices)

8.9% (2011) - country comparison to the world: 183

Stock of domestic credit

USD 759.6 billion (31 December 2011) - country comparison to the world: 20

USD 573.2 billion (31 December 2010)

Electricity production

925.9 billion kWh (2009) - country comparison to the world: 5

Oil production

10.27 million bbl/day (2010) - country comparison to the world: 2

Natural gas production

588.9 billion cu m (2010) - country comparison to the world: 2

Imports

USD 310.1 billion (2011) - country comparison to the world: 18

USD 237.3 billion (2010)  

NOTE: The information regarding statistics on this page is re-published from the 2012 World Fact Book of the United States Central Intelligence Agency.