Russian Economy

Basic Information

Due to its geographical position, Russia possesses a great number of natural resources. According to the World Bank, the Russian Federation is in first place for holding the world’s natural gas reserves, second place for coal reserves, and eighth place for reserves of oil. Russia is among the top 10 largest economies in the world by GDP at current prices. 

Russia is also a member of important international economic organizations. In 1992, Russia joined the International Monetary Fund and in 2012, the country entered the WTO. At the same time, Russia is a member of the G-20, the forum of the world’s largest economies, and the BRICS, a group of five emerging economies. According to Goldman Sachs economist Jim O’Neill, BRICS economies (Brazil, Russia, India, China, and South Africa – the latter added to the list later) would dominate the world’s economy by 2050. 

Russia participates also in regional organizations for economic cooperation, for example, in the Eurasian Economic Union. The latter is an ambitious regional organization, which aims to create a single market and, therefore, guarantee “four free movements”: free movement of goods, services, labor, and capital – among its members.

Trends

After the fall of the Soviet Union, Russia took steps to transform its economic system from a centrally planned economy to a mixed market-oriented one. It had an impact on the structure of its GDP, which became dominated by the services sphere. Nowadays Russian GDP consists of three main parts: services (67,8%), industry (26,6%), and agriculture (5,6%). 

The reforms of the 1990s were not easy and caused economic difficulties in the beginning. However, from 1999 to 2008, the Russian GDP began to grow rapidly (at least 4,7% each year). After the drop triggered by the global financial crisis in 2008-2009, the Russian economy returned to a decent pace of growth in 2011-2012. During the next couple of years, Russia faced a slowdown in its economic development caused by various reasons. Nevertheless, in 2016-2018, the Russian GDP managed to rise again. In 2020, the Covid-19 pandemic posed challenges to this development, which the Russian economy successfully overcame and in 2021, Russian GDP growth appeared to be the best since 2008.

International Economic Relations

After 1991, Russia was not only pursuing economic reforms but also becoming eager to develop strong economic ties with other countries from all over the world. According to the Ministry of Economic Development of the Russian Federation, the country aims to improve trade and investment regimes with foreign partners and develop multilateral economic cooperation.

What does Russia export and import?

• The main export products of Russia are natural resources. In 2021, the share of mineral products made up 43,7% of total Russian export, according to Ru-Stat, while metals and products made of them comprised 11,6%. Among important Russian export products, there are Jewelry, Chemical industry products, Machinery and Equipment, Wood and Wood Products, and Vegetable products.

• As for Russian import products, machinery and equipment were the most important import goods (31,1%) in 2021, according to Ru-Stat. At the same time, Chemical industry products (12,2%) and Transport (11,1%) were among the top-3 imported products in 2021. They were followed by Metals and Products made of them, Plastics and Rubber, Textile, Vegetable products, and Food, Beverages, and Tobacco.