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Russia:
Economy

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Economy - overview
Definition
Russia ended 2007 with its ninth straight year of growth, averaging 7% annually since the financial crisis of 1998. Although high oil prices and a relatively cheap ruble initially drove this growth, since 2003 consumer demand and, more recently, investment have played a significant role. Over the last six years, fixed capital investments have averaged real gains greater than 10% per year and personal incomes have achieved real gains more than 12% per year. During this time, poverty has declined steadily and the middle class has continued to expand. Russia has also improved its international financial position since the 1998 financial crisis. The federal budget has run surpluses since 2001 and ended 2007 with a surplus of about 3% of GDP. Over the past several years, Russia has used its stabilization fund based on oil taxes to prepay all Soviet-era sovereign debt to Paris Club creditors and the IMF. Foreign debt is approximately one-third of GDP. The state component of foreign debt has declined, but commercial debt to foreigners has risen strongly. Oil export earnings have allowed Russia to increase its foreign reserves from $12 billion in 1999 to some $470 billion at yearend 2007, the third largest reserves in the world. During President PUTIN's first administration, a number of important reforms were implemented in the areas of tax, banking, labor, and land codes. These achievements have raised business and investor confidence in Russia's economic prospects, with foreign direct investment rising from $14.6 billion in 2005 to approximately $45 billion in 2007. In 2007, Russia's GDP grew 8.1%, led by non-tradable services and goods for the domestic market, as opposed to oil or mineral extraction and exports. Rising inflation returned in the second half of 2007, driven largely by unsterilized capital inflows and by rising food costs, and approached 12% by year-end. In 2006, Russia signed a bilateral market access agreement with the US as a prelude to possible WTO entry, and its companies are involved in global merger and acquisition activity in the oil and gas, metals, and telecom sectors. Despite Russia's recent success, serious problems persist. Oil, natural gas, metals, and timber account for more than 80% of exports and 30% of government revenues, leaving the country vulnerable to swings in world commodity prices. Russia's manufacturing base is dilapidated and must be replaced or modernized if the country is to achieve broad-based economic growth. The banking system, while increasing consumer lending and growing at a high rate, is still small relative to the banking sectors of Russia's emerging market peers. Political uncertainties associated with this year's power transition, corruption, and lack of trust in institutions continue to dampen domestic and foreign investor sentiment. PUTIN has granted more influence to forces within his government that desire to reassert state control over the economy. Russia has made little progress in building the rule of law, the bedrock of a modern market economy. The government has promised additional legislative amendments to make its intellectual property protection WTO-consistent, but enforcement remains problematic.
GDP (purchasing power parity)
Definition - World rank and map
$2.088 trillion (2007 est.)
GDP (official exchange rate)
Definition
$1.286 trillion (2007 est.)
GDP - real growth rate
Definition - World rank and map
8.1% (2007 est.)
GDP - per capita
Definition - World rank and map
$14,700 (2007 est.)
GDP - composition by sector
Definition
agriculture: 4.7%
industry: 39.1%
services: 56.2% (2007 est.)
Labor force
Definition
74.1 million (2007 est.)
Labor force - by occupation
Definition
agriculture: 10.8%
industry: 28.8%
services: 60.5% (November 2007 est.)
Unemployment rate
Definition - World rank and map
6.2% (2007 est.)
Population below poverty line
Definition
15.8% (November 2007)
Household income or consumption by percentage share
Definition
lowest 10%: 1.9%
highest 10%: 30.4% (September 2007)
Distribution of family income - Gini index
Definition - World rank and map
41.3 (September 2007)
Inflation rate (consumer prices)
Definition - World rank and map
11.9% annual average
note: 12% at year-end (2007 est.)
Investment (gross fixed)
Definition - World rank and map
21% of GDP (2007 est.)
Budget
Definition
revenues: $299 billion
expenditures: $262 billion (2007 est.)
Public debt
Definition - World rank and map
5.9% of GDP (2007 est.)
Agriculture - products
Definition
grain, sugar beets, sunflower seed, vegetables, fruits; beef, milk
Industries
Definition
complete range of mining and extractive industries producing coal, oil, gas, chemicals, and metals; all forms of machine building from rolling mills to high-performance aircraft and space vehicles; defense industries including radar, missile production, and advanced electronic components, shipbuilding; road and rail transportation equipment; communications equipment; agricultural machinery, tractors, and construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables, textiles, foodstuffs, handicrafts
Industrial production growth rate
Definition - World rank and map
7.4% (2007 est.)
Electricity - production
Definition - World rank and map
1 trillion kWh (2007 est.)
Electricity - consumption
Definition - World rank and map
985.2 billion kWh (2007 est.)
Electricity - consumption per capita
Definition - World rank and map
7,002.1 kWh (2007 est.)
Electricity - exports
Definition
18 billion kWh (2007)
Electricity - imports
Definition
2.9 billion kWh (2007 est.)
Oil - production
Definition - World rank and map
9.87 million bbl/day (2007)
Oil - consumption
Definition - World rank and map
2.916 million bbl/day (2006)
Oil - consumption per 1,000 people
Definition - World rank and map
20.7 bbl/day (2006)
Oil - exports
Definition - World rank and map
5.08 million bbl/day (2007)
Oil - imports
Definition - World rank and map
100,000 bbl/day (2005)
Oil - proved reserves
Definition - World rank and map
60 billion bbl (1 January 2006 est.)
Natural gas - production
Definition - World rank and map
656.2 billion cu m (2007 est.)
Natural gas - consumption
Definition - World rank and map
610 billion cu m (2007 est.)
Natural gas - consumption per capita
Definition - World rank and map
4,335 cu m (2007 est.)
Natural gas - exports
Definition - World rank and map
182 billion cu m (2007 est.)
Natural gas - imports
Definition - World rank and map
37.5 billion cu m (2005)
Natural gas - proved reserves
Definition - World rank and map
47.57 trillion cu m (1 January 2006)
Current account balance
Definition - World rank and map
$76.6 billion (2007 est.)
Exports
Definition - World rank and map
$365 billion (2007 est.)
Exports - commodities
Definition
petroleum and petroleum products, natural gas, wood and wood products, metals, chemicals, and a wide variety of civilian and military manufactures
Exports - partners
Definition
Germany 9.5%, Netherlands 7.5%, Turkey 6%, Italy 5.6%, Ukraine 5%, China 5%, US 4.8%, Belarus 4.6%, Switzerland 4% (2006)
Imports
Definition - World rank and map
$260.4 billion (2007 est.)
Imports - commodities
Definition
machinery and equipment, consumer goods, medicines, meat, sugar, semifinished metal products
Imports - partners
Definition
Germany 16.3%, China 12.4%, Italy 5.5%, Ukraine 5.1%, Japan 4.9%, Belarus 4% (2006)
Reserves of foreign exchange and gold
Definition - World rank and map
$476.4 billion (31 December 2007 est.)
Debt - external
Definition - World rank and map
$343.1 billion (31 December 2007)
Stock of direct foreign investment - at home
Definition
$271.6 billion (2006)
Stock of direct foreign investment - abroad
Definition
$209.6 billion (2006)
Market value of publicly traded shares
Definition
$1.322 trillion (2006)
Economic aid - recipient
Definition
$982.7 million in FY06 from US, including $847 million in non-proliferation subsidies
Currency (code)
Definition
Russian ruble (RUB)
Exchange rates
Definition
Russian rubles per US dollar - 25.659 (2007), 27.19 (2006), 28.284 (2005), 28.814 (2004), 30.692 (2003)
Fiscal year
Definition
calendar year


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