Russia: Economy

Economy - overview

Russia ended 2003 with its fifth straight year of growth, averaging 6.5% annually since the financial crisis of 1998. Although high oil prices and a relatively cheap ruble are important drivers of this economic rebound, since 2000 investment and consumer-driven demand have played a noticeably increasing role. Real fixed capital investments have averaged gains greater than 10% over the last four years and real personal incomes have averaged increases over 12%. Russia has also improved its international financial position since the 1998 financial crisis, with its foreign debt declining from 90% of GDP to around 28%. Strong oil export earnings have allowed Russia to increase its foreign reserves from only $12 billion to some $80 billion. These achievements, along with a renewed government effort to advance structural reforms, have raised business and investor confidence in Russia's economic prospects. Nevertheless, serious problems persist. Oil, natural gas, metals, and timber account for more than 80% of exports, leaving the country vulnerable to swings in world prices. Russia's manufacturing base is dilapidated and must be replaced or modernized if the country is to achieve broad-based economic growth. Other problems include a weak banking system, a poor business climate that discourages both domestic and foreign investors, corruption, local and regional government intervention in the courts, and widespread lack of trust in institutions. In addition, a string of investigations launched against a major Russian oil company, culminating with the arrest of its CEO in the fall of 2003, have raised concerns by some observers that President PUTIN is granting more influence to forces within his government that desire to reassert state control over the economy.

GDP

purchasing power parity - $1.287 trillion (2003 est.)

GDP - real growth rate

7.3% (2003 est.)

GDP - per capita

purchasing power parity - $8,900 (2003 est.)

GDP - composition by sector

agriculture: 5.2%
industry: 35%
services: 59.8% (2003 est.)

Population below poverty line

25% (January 2003 est.)

Household income or consumption by percentage share

lowest 10%: 5.9%
highest 10%: 47% (2001)

Distribution of family income - Gini index

39.9 (2001)

Inflation rate (consumer prices)

12% (2003 est.)

Labor force

71.5 million (2003 est.)

Labor force - by occupation

agriculture 12.3%, industry 22.7%, services 65% (2002 est.)

Unemployment rate

8.4% plus considerable underemployment (December 2003 est.)

Budget

revenues: $70 billion
expenditures: $62 billion, including capital expenditures of $NA (2002 est.)

Industries

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; 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

7% (2003 est.)

Electricity - production

915 billion kWh (2003)

Electricity - production by source

fossil fuel: 66.3%
hydro: 17.2%
other: 0.1% (2003)
nuclear: 16.4%

Electricity - consumption

773 billion kWh (2001)

Electricity - exports

21.16 billion kWh (2001)

Electricity - imports

7 billion kWh (2001)

Oil - production

7.286 million bbl/day (2001 est.)

Oil - consumption

2.595 million bbl/day (2001 est.)

Oil - exports

NA

Oil - imports

NA

Oil - proved reserves

51.22 billion bbl (1 January 2002)

Natural gas - production

580.8 billion cu m (2001 est.)

Natural gas - consumption

408.1 billion cu m (2001 est.)

Natural gas - exports

205.4 billion cu m (2001 est.)

Natural gas - imports

32.7 billion cu m (2001 est.)

Natural gas - proved reserves

47.86 trillion cu m (1 January 2002)

Agriculture - products

grain, sugar beets, sunflower seed, vegetables, fruits; beef, milk

Exports

$134.4 billion (2003 est.)

Exports - commodities

petroleum and petroleum products, natural gas, wood and wood products, metals, chemicals, and a wide variety of civilian and military manufactures

Exports - partners

Germany 7.5%, Italy 6.9%, Netherlands 6.7%, China 6.3%, US 6.1%, Ukraine 5.5%, Belarus 5.4%, Switzerland 5% (2002)

Imports

$74.8 billion (2003 est.)

Imports - commodities

machinery and equipment, consumer goods, medicines, meat, sugar, semifinished metal products

Imports - partners

Germany 14.3%, Belarus 8.9%, Ukraine 7.1%, US 6.4%, China 5.2%, Italy 4.8%, Kazakhstan 4.3%, France 4.1% (2002)

Debt - external

$165.4 billion (September 2003)

Economic aid - recipient

in FY01 from US, $979 million (including $750 million in non-proliferation subsidies); in 2001 from EU, $200 million (2000 est.)

Currency

Russian ruble (RUR)

Currency code

RUR

Exchange rates

Russian rubles per US dollar - 30.69 (2003), 31.35 (2002), 29.17 (2001), 28.13 (2000), 24.62 (1999)
note: the post-1 January 1998 ruble is equal to 1,000 of the pre-1 January 1998 rubles

Fiscal year

calendar year