After experiencing record recession since the fall of the Soviet bloc (-7.9%) in 2009, growth at first slightly recovered, but again remained weak in 2013 (1.3%), being driven only by household consumption and an excessive boom in consumer credit. For 2013, growth predictions are around 0% due to the outflow of capital, the volatility of the forex market and a possible decline in the prices of oil.
Despite high energy prices and the global economic recovery, the Russian economy reached its lowest level of growth since the 2008-2009 crisis and there has been a drop in investment. Growth is partially impedede by the restrictive monetary policy of the Central Bank, which is trying to contain the high levels of inflation (7% annually). Industrial production has been badly harmed and suffers from lack of competitiveness, while at the same time Russian has become a member of the WTO. Wages are growing on average more quickly than productivity. Despite the high price of oil barrel, the current account surplus has diminished and the country has been experiencing a leaking of capital. Its limited production capacities, insufficient investnment, the excessively strong rouble and limited access to credit have all contributed to its economic slowdown. Teh 2014-2016 austerity budget is planning to introduce a number of budget cuts, while the main strategy remains unchallanged. A budget deficit of 0.5% of the GDP is predicted for 2014, its double (1%) in 2015 and 0.6% in the following year. Because of the weaker rouble and higher energy prices than predicted, the budget could nonetheless avoid creating any deficit at all in 2014. A reduction in spending of at least 5% in all areas has been agreed, with the exception of social spending, civil servant wages and Russia's foreign commitments. Defense spending will rise by 18% in 2014 and 33% over the following two years, as part of the ten-year rearmament programme which aims to modernize Russia's military. The Russian economy is facing many challenges: its dependence on raw materials, which makes it a largely a rentier economy, corruption responsible for a bad business climate, lack of structural reforms, an aging population, vulnerability to the economic instability of the eurozone and the possible slowdown of Chinese growth, the fall of the ruble, or the decline in oil prices.
The unemployment rate, which risen as an effect of the 2008/9 crisis, has now decreased to near pre-crisis levels (6%) and real wages have grown. However, social inequalities are still marked, particularly between big cities and rural areas. Only 1% of the population owns 71% of private assets. Despite the appearance of an urban middle class, the poverty rate is still at 16%. A protest movement coming from the middle classes has been demanding the end to corruption and nepotism.
|Main Indicators||2011||2012||2013||2014||2015 (e)|
|GDP (billions USD)||1,904.79||2,017.47||2,096.77||2,057.30e||2,098.85|
|GDP (Constant Prices, Annual % Change)||4.3||3.4||1.3e||0.2||0.5|
|GDP per Capita (USD)||13,320||14,079||14||14,317||14,606|
|General Government Balance (in % of GDP)||1.6||-0.2||-1.5e||-0.8||-0.8|
|General Government Gross Debt (in % of GDP)||11.6||12.7||13.9e||15.7e||16.5|
|Inflation Rate (%)||8.4||5.1||6.8||7.4e||7.3|
|Unemployment Rate (% of the Labor Force)||6.5||5.5||5.5||5.6||6.5|
|Current Account (billions USD)||97.27||71.28||32.76||55.89e||64.59|
|Current Account (in % of GDP)||5.1||3.5||1.6e||2.7||3.1|
Source: IMF - World Economic Outlook Database , Last Available Data
Note: (e) Estimated Data
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 large surface area, Russia has a relatively small amount of arable land 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. Tourism is becoming an important source of revenue.
|Breakdown of Economic Activity By Sector||Agriculture||Industry||Services|
|Employment By Sector (in % of Total Employment)||9.7||27.9||62.3|
|Value Added (in % of GDP)||3.9||36.3||59.8|
|Value Added (Annual % Change)||-2.0||0.1||2.4|
Source: World Bank - Last Available Data.
|Russian Rouble (RUB) - Average Annual Exchange Rate For 1 USD||31.74||30.37||29.38||30.84||31.84|
Source: World Bank - Last Available Data.
The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labor freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.
The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.
The country is fairly open to foreign trade (which represents around 50% of the GDP) despite the nationalistic attitude of its leaders and strict legislation and fare policies. Russia is amongst the 12 largest exporters and one of the 20 largest importers in the world. Its main trade partners are China, Germany, The Netherlands and the United States.
The country shows a high trade surplus, thanks to its rich natural resources, especially hydrocarbons, and this should continue regardless of the drop in raw material prices and the deterioration of the global economic situation, which might reduce its surplus. In 2013, Russia's trade balance (179 billion USD) declined by 6.9% compared to 2012, with exports declining by 0.9% while imports grew by 2.6%.
|Foreign Trade Indicators||2009||2010||2011||2012||2013|
|Imports of Goods (million USD)||191,803||248,634||323,831||335,446||344,283|
|Exports of Goods (million USD)||303,388||400,630||522,011||529,255||523,327|
|Imports of Services (million USD)||59,241||71,358||87,307||104,003||123,420|
|Exports of Services (million USD)||41,068||44,566||54,532||58,229||65,612|
|Imports of Goods and Services (Annual % Change)||-30.4||25.8||20.3||8.8||3.7|
|Exports of Goods and Services (Annual % Change)||-4.7||7.0||0.3||1.4||4.2|
|Imports of Goods and Services (in % of GDP)||20.5||21.1||21.7||22.3||22.5|
|Exports of Goods and Services (in % of GDP)||27.9||29.2||30.3||29.6||28.4|
|Trade Balance (million USD)||113,231||146,995||196,854||191,663||181,939|
|Trade Balance (Including Service) (million USD)||95,630||120,875||163,398||145,076||123,661|
|Foreign Trade (in % of GDP)||48.4||50.4||52.0||51.9||50.9|
Source: WTO - World Trade Organization ; World Bank , Last Available Data
(% of Exports)
|See More Countries||66.5%|
(% of Imports)
|See More Countries||56.1%|
Source: Comtrade, Last Available Data
|- bn USD of products exported in 2013|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude||32.9%|
|Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals||20.8%|
|Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons||14.2%|
|Coal; briquettes, ovoids and similar solid fuels...Coal; briquettes, ovoids and similar solid fuels manufactured from coal||2.2%|
|Semi-finished products of iron or non-alloy steelSemi-finished products of iron or non-alloy steel||1.2%|
|See More Products||28.7%|
|- bn USD of products imported in 2013|
|Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702)||5.4%|
|Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006)||3.7%|
|Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s.||3.6%|
|Transmission apparatus for radio-telephony,...Transmission apparatus for radio-telephony, radio-telegraphy, radio-broadcasting or television, whether or not incorporating reception apparatus or sound recording or reproducing apparatus; television cameras; still image video cameras and other video camera recorders; digital cameras||1.9%|
|Automatic data processing machines and units...Automatic data processing machines and units thereof; magnetic or optical readers, machines for transcribing data onto data media in coded form and machines for processing such data, n.e.s.||1.8%|
|See More Products||83.6%|
Source: Comtrade, Last Available Data
|- bn USD of services exported in 2012|
|Air transportAir transport||18.79%|
|Sea transportSea transport||7.13%|
|Rail transportRail transport||3.89%|
|Road transportRoad transport||1.15%|
|Space transportSpace transport||0.03%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||12.61%|
|Advertising, market research,...Advertising, market research, and public opinion polling||7.21%|
|Architectural, engineering,...Architectural, engineering, and other technical services||7.03%|
|Other business servicesOther business services||4.71%|
|Research and developmentResearch and development||0.73%|
|Operational leasing servicesOperational leasing services||2.73%|
|Business travelBusiness travel||12.31%|
|Personal travelPersonal travel||7.29%|
|Construction in the compiling...Construction in the compiling economy||6.87%|
|Construction abroadConstruction abroad||1.75%|
|Audiovisual and related servicesAudiovisual and related services||0.57%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||0.44%|
|Other direct insuranceOther direct insurance||0.36%|
|Auxiliary servicesAuxiliary services||0.08%|
|Freight insuranceFreight insurance||0.03%|
|Life insurance and pension fundingLife insurance and pension funding||0.02%|
|- bn USD of services imported in 2012|
|Personal travelPersonal travel||40.00%|
|Business travelBusiness travel||1.99%|
|Miscellaneous business,...Miscellaneous business, professional, and technical services||5.52%|
|Architectural, engineering,...Architectural, engineering, and other technical services||4.89%|
|Other business servicesOther business services||2.88%|
|Advertising, market research,...Advertising, market research, and public opinion polling||1.70%|
|Research and developmentResearch and development||0.17%|
|Operational leasing servicesOperational leasing services||3.60%|
|Air transportAir transport||9.96%|
|Sea transportSea transport||3.95%|
|Rail transportRail transport||1.16%|
|Road transportRoad transport||0.82%|
|Space transportSpace transport||0.05%|
|Construction in the compiling...Construction in the compiling economy||6.69%|
|Construction abroadConstruction abroad||0.66%|
|Other direct insuranceOther direct insurance||0.12%|
|Auxiliary servicesAuxiliary services||0.06%|
|Life insurance and pension fundingLife insurance and pension funding||0.03%|
|Audiovisual and related servicesAudiovisual and related services||0.80%|
|Other personal, cultural, and...Other personal, cultural, and recreational services||0.29%|
Source: Comtrade, Last Available Data
The world rankings, published annually, measures the violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire sent to partner organizations,150 RWB correspondents, journalists, researchers, jurists and activists of human rights, including the main criteria - 44 in total - to assess the situation of press freedom in a given country. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).
The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.
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