RUSSIA


A large diverse country with vast natural resources striving to find its place in the world after the 1991 breakdown of the Soviet Union

Geographically the largest country and the seventh most populous country in the world

Total area: 17,075,200 sq km (approximately 1.8 times the size of the U.S.)
Population:  147 million
Government type: Federal semi-presidential constitutional republic
Administrative division: 46 provinces (called “oblast”), 21 republics (“respublika”), 4 autonomous okrugs (“avtonomnyy okrug”), 9 krays, 2 federal cities (“gorod”), and 1 autonomous oblast (“avtonomnaya oblast”)
Capital + other major cities: Moscow (11.5 million) + St. Petersburg (4.9 million), Novosibirsk (1.5 million), Yekaterinburg (1.3 million), Nizhniy Novgorod (1.25 million) , Samara (1.2 million), Omsk (1.2 million), Kazan (1.1 million), Chelyabinsk (1.1 million) , Rostov-na-Donu (1.1 million), Ufa (1.1 million), Volgograd (1.0 million), Perm (1.0 million)
Currency: Russian ruble (RUR)
Languages: Russian (official) 96.3%, many minority languages (roughly 100 other languages are spoken in Russia)
Ethnicity: Russian 77.7%, Tatar 3.7%, Ukrainian 1.4%, Bashkir 1.1%, Chuvash 1%, Chechen 1%, other 10.2%, unspecified 3.9%
Religion: Russian Orthodox 15-20%, Muslim 10-15%, other Christian 2%, Russia has large population of non-practicing believers and non-believers
President: (Mr.) Vladimir Vladimirovich PUTIN (since 7 May 2012)
Prime Minister: (Mr.) Dmitriy Anatolyevich MEDVEDEV (since 8 May 2012)
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KEY FEATURES

  • Vast variety of natural resources mostly located far from industrial processing centers
  • Huge market with further potential for economic growth
  • Crossroad between the West's and East's economies
  • Leader in the Eurasian Economic Union, an integrated single market of 5 countries and 183 million people
  • Despite political tensions, people in Russia still have the most western type of thinking arguably of all Asian states
  • Labor costs bellow most of the European countries
  • World's largest producer of crude oil and second largest producer of natural gas
  • Top exporter of wheat

MACROECONOMIC OVERVIEW

Selected economic indicators, Russia, 2012 - 2018

    2012 2013 2014 2015 2016 2017 2018
GDP
Real GDP growth
%
3.5
1.3
0.7
-3.7
1.5
2.5
2.5
GDP at current prices
€ bn
1,690
1,680
1,528
1,194
1,152
1,415
1,414
Foreign trade
Exports
€ bn
408
397
375
310
242
306
Imports
€ bn
246
237
215
164
162
199
Balance
€ bn
162
160
159
145
80
107
Prices
CPI - average inflation rate
%
5.1
6.8
7.8
15.5
7.1
3.7
2.8
PPI - industry - average
%
5.1
3.7
5.9
10.7
5.5
5.2
5.5
Employment
Registered unemployment
%
5.5
5.5
5.6
6.5
6.2
6.0
6.0
Average monthly gross wage
667
704
638
499
484
512
575
Exchange rates
RUR/USD average
31.08
31.86
38.51
61.19
67.03
58.32
62.83
RUR/EUR average
39.93
42.34
50.95
68.07
74.14
65.94
74.04

Source: Federal Statistical Service, European Commission, IMF, 2017-2018


Russia is the world’s eleventh largest economy by nominal gross domestic product (GDP) and the sixth largest by purchasing power parity (PPP), as cited by the International Monetary Fund (IMF). According to the IMF, 2017 GDP per capita (PPP) was $27,890, the highest of the BRICS countries (Brazil, Russia, India, China, and South Africa). Russia is a high-income country, with an educated, trained workforce and sophisticated, discerning consumers.


A combination of low oil prices, structural limitations, and sanctions pushed Russia into a recession in 2015, with the economy contracting by four percent. The Russian economy then fell by about 0.6 percent in 2016.


After some years of negative growth, due to staggering capital flight, the collapse of the ruble, the decline in oil prices and Western trade sanctions because of the Ukraine crisis, the Russian economy returned to modest growth since 2017, driven mostly by mineral resource extractions and private consumption. Growth was estimated by IMF at 1.7% GDP for 2018, supported by rising credit and disposable incomes, and is projected to stagnate at 1.8% GDP in 2019 and 2020. Structural weaknesses, low investment levels and a poor demographic outlook will keep real GDP growth well below 2% per year in the medium term.


In 2014, Russia along with Belarus, Kazakhstan, Armenia and Kyrgyzstan established the Eurasian Economic Union. It is currently an integrated single market of these 5 countries, with 183 million people and a gross domestic product of over USD 4 trillion (PPP). The EEU introduces free movement of goods, capital, services and people and provides for common transport, agriculture and energy policies, with provisions for a single currency and greater integration in the future. The long term plan is to integrate more countries to the union and create "powerful, supra-national union" of sovereign states like the European Union.



KEY SECTORS

Russia has a wealth of natural resources. It is the world's second largest producer of natural gas and the largest producer of oil, but also one of the leading producers and exporters of diamonds, nickel and platinum. Despite its large surface area, Russia has a relatively small amount of arable land because of unfavourable climatic conditions. The country nevertheless has 10% of global agricultural lands and is one of the major exporters of grain. The northern regions of the country concentrate mainly on livestock, while the southern regions and western Siberia produce cereals. Agriculture contributes 4% to national GDP and employs about 6.5% of the total labour force.

Industry represents 30% of Russia's GDP and employs nearly 27% of the active population. The country inherited most of the Soviet Union's industrial bases. The best-developed sectors are chemicals, metallurgy, mechanics, construction and defense.

The services sector employs about two-thirds of the population (66%) and generates over 56% of the GDP. Since the 1998 financial crisis, 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 also becoming an important source of revenue.

Russia is 2nd in the world and not far behind the leading USA in sales and exports of weapons.

Russia’s economy remains commodity-driven; payments from the fuel and energy sector in the form of customs duties and taxes account for nearly half of the federal budget's revenues.

Russia now ranks as the number three destination for software outsourcing behind India and China.


EXPORTS & IMPORTS


In 2018 Russia (4 %) was the 4th largest partner for EU exports of goods and the 3rd largest partner for EU imports of goods (8 %). It was the third largest partner for EU imports of goods (8 %), preceded by China (20 %) and the United States (13 %) and followed by Switzerland (6 %) and Norway (4 %). The most exported manufactured goods were machinery & vehicles (45 %), followed by other manufactured products (24 %) and chemicals (21 %). The most imported primary goods were energy (68 %), followed by raw materials (3 %) and food & drink (1 %).


2017 export and import data:




Main import partners:
China – 21.2!% (compared to 10.2% in 2015)
Germany – 10.7%
USA – 5.6%
Belarus – 5%
Italy – 4.5%


Main export partners:
Chinas – 10.9%
Netherlands – 10%
Germany – 7.1%
Belarus – 5.1%
Turkey - 4.9%


Russia external trade - 2015




See references for our track record in Russia.



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