Russia

Capital: Moscow

Local time:
It is %T:%M %A in Moscow, Kazan, Saint Petersburg
It is %T:%M %A in Iekaterinbourg, Perm, Chelyabinsk
It is %T:%M %A in Novosibirsk, Omsk
It is %T:%M %A in Vladivostok, Khabarovsk

GDP growth rate: 4.1% in 2013

FDI stock: 423 150 million USD in 2010

Economic trends

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 2010-2011 was strong (4.3% growth according to estimates), driven by fuel exports and domestic demand stimulated by the increase in salaries. The unfavorable international context caused by the eurozone crisis and the political uncertainty in Russia should have an effect on both investors nad consumers and slow down growth in 2012 (3.3%).

Russia benefits from steady economic growth, nonexistent budget deficit and a government debt nearing zero. However, because of its dependence on hydrocarbons, the Russian economy remains vulnerable to external shocks and will be affected by the instability of financial markets and the recession in the eurozone. Before the 2012 election a number of popular measures have been taken, such as rising wages, pensions and social benefits. The fight against inflation and capital flight remains the government's priority, as well as economic diversification and support for the agricultural sector. In the longer term, the problem of demographic decline will become pressing.

The unemployment rate, which risen as an effect of the 2008/9 crisis, has now decreased to near pre-crisis levels (6.3% in January 2012). Social inequalities 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 branches 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 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.

International trade

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 10 primary exporters and 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 and this should continue regardless of the drop in raw material prices and the deterioration of the global economic situation.