Trends and Growth

The economy of Russia is the twelfth largest economy in the world by nominal value and the seventh largest by purchasing power parity (PPP). In terms of purchasing power parity Russia’s GDP is already the second largest in Europe after Germany.

The Russian economy underwent tremendous stress as it moved from a centrally planned economy to a free market system. Starting in 1991, after the breakup of the USSR, Russia’s GDP witnessed a sustained period of decline until 1998. After the 1998 economic crisis, the Russian economy began to pick up, with annual GDP growth at around 7% from 1999 to 2007. Driving this recovery were sharp increases in prices for Russia’s main exports (oil, petroleum products, natural gas, metals), the import substitution effect caused by the rouble’s devaluation in 1998, tax reform, a tightening of fiscal policy, and greater social and political stability. Economic growth was also the result of an unprecedented boom in consumer-oriented sectors, particularly in the construction and service industries.

The global economic crisis hit Russia in the second half of 2008. Following the world’s lead, the Russian economy began to shrink. The economic picture in Russia reflected that seen in Western Europe, US and other economic powers. A positive recovery trend took place in the second half of the 2009, when the economy resumed moderate growth.

At the end of 2009, the international credit rating agencies Standard & Poor, Fitch and Moody's revised their sovereign rating outlooks for Russia from “negative” to “stable”.

The Ministry of Economic Development has drafted three economic development scenarios for the next three years: moderately conservative, pessimistic and optimistic. According to the basic scenario, moderately conservative, GDP will grow by 3.1% in 2010, by 3.4% in 2011 and by 4.2% in 2012.

Russia will play a key role in Europe's recovery as one of the few engines of growth on the continent in the near term, according to a June 2010 World Bank report. Unlike its neighbors, Russia has already bounced back and largely returned to pre-crisis levels, driving the economic recovery in the region. The World Bank is expecting rising wages, oil revenues and "a reduced drag from the financial sector to support an increasing prominent role for domestic demand in the recovery," forces that will be off-set by a return to the appreciation of the ruble. The World Bank expects Russia's economy to grow by 4.8 percent and 4.7 percent in 2011 and 2012 respectively.

Leading Sectors

• Energy, Utilities and Mining
• Metallurgy
• Agriculture
• Retail & Consumer
• Communications and IT
• Automotive

^{“Doing business and investing in the Russian Federation 2010” report (PricewaterhouseCoopers)}

<sup>Economy of Russia - Wikipedia

“Russia will be the driver for Europe's economic recovery says World Bank” – Russia beyond the headlines</sup>