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Russia - Overview

Contents extracted from the comprehensive atlas of international trade by Export Entreprises


Capital:: Moscow
Area:: 17.098 km2
Total Population:: 143.533
Annual growth rate:: 0.00%
Density:: 9.00/km2
Urban population:: 74%
Population of Moscow (14.800), St Petersburg (4.900), Nizhniy Novgorod (1.900), Samara (1.500), Novosibirsk (1.429), Ekaterinburg (1.389), Kazan (1.300), Volgograd (1.292)
Official language: Russian
Other languages spoken: More than 150 languages are spoken in the Russian Federation and some of them are the official language in a part of the country.
Business language: English is more and more widespread.
Managers often understand English better than they speak it. You must be prepared to conduct negotiations in Russian.
Ethnic Origins::
Russians (81.6%), Tatars (3.8 %), Ukrainians (3 %), Chuvashes (1.2 %), Bashkirs (0.9 %), others (9.5%).
Beliefs: 82% of Russians are believers. Orthodox 70%, Muslims 10%, Catholics 1,2%, Buddhists 0,7%.
Telephone codes:
To make a call from: 810
To make a call to: +7
Internet suffix:: .ru
Type of State::
Federal republic based on parliamentary democracy. Presidential government.
Type of economy::
Upper-middle-income economy, Transition country, Emerging Financial Market, G8 member
The largest country in the world; leading producer and exporter of natural gas in the world, and second largest producer and exporter of petroleum in the world; poverty affects 16% of the population

Economic overview

After experiencing record recession since the fall of the Soviet bloc (-7.9%) in 2009, growth at first slightly recovered, but again remained weak in 2013 (1.3%), being driven only by household consumption and an excessive boom in consumer credit. For 2013, growth predictions are around 0% due to the outflow of capital, the volatility of the forex market and a possible decline in the prices of oil.

Despite high energy prices and the global economic recovery, the Russian economy reached its lowest level of growth since the 2008-2009 crisis and there has been a drop in investment. Growth is partially impedede by the restrictive monetary policy of the Central Bank, which is trying to contain the high levels of inflation (7% annually). Industrial production has been badly harmed and suffers from lack of competitiveness, while at the same time Russian has become a member of the WTO. Wages are growing on average more quickly than productivity. Despite the high price of oil barrel, the current account surplus has diminished and the country has been experiencing a leaking of capital.  Its limited production capacities, insufficient investnment, the excessively strong rouble and limited access to credit have all contributed to its economic slowdown. Teh 2014-2016 austerity budget is planning to introduce a number of budget cuts, while the main strategy remains unchallanged. A budget deficit of 0.5% of the GDP is predicted for 2014, its double (1%) in 2015 and 0.6% in the following year. Because of the weaker rouble and higher energy prices than predicted, the budget could nonetheless avoid creating any deficit at all in 2014. A reduction in spending of at least 5% in all areas has been agreed, with the exception of social spending, civil servant wages and Russia's foreign commitments. Defense spending will rise by 18% in 2014 and 33% over the following two years, as part of the ten-year rearmament programme which aims to modernize Russia's military. The Russian economy is facing many challenges: its dependence on raw materials, which makes it a largely a rentier economy, corruption responsible for a bad business climate, lack of structural reforms, an aging population, vulnerability to the economic instability of the eurozone and the possible slowdown of Chinese growth, the fall of the ruble, or the decline in oil prices.

The unemployment rate, which risen as an effect of the 2008/9 crisis, has now decreased to near pre-crisis levels (6%) and real wages have grown. However, social inequalities are still marked, particularly between big cities and rural areas. Only 1% of the population owns 71% of private assets. Despite the appearance of an urban middle class, the poverty rate is still at 16%. A protest movement coming from the middle classes has been demanding the end to corruption and nepotism.

Main industries

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. Tourism is becoming an important source of revenue.

Foreign trade overview

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 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, thanks to its rich natural resources, especially hydrocarbons, and this should continue regardless of the drop in raw material prices and the deterioration of the global economic situation, which might reduce its surplus. In 2013, Russia's trade balance (179 billion USD) declined by 6.9% compared to 2012, with exports declining by 0.9% while imports grew by 2.6%.


For the first time in its history, Russia has become the third largest global recipient of FDI flows according to the UNCTAD Global Investment Monitor. In 2013, FDI flows into Russia reached a record of 94b USD, which represents an 83% increase compared to the preceding year. This boom was mainly caused by the British company BP aquiring a 18.5% stake in Rosneft as part of Rosneft's acquisition of TNK-BP for the sum of 57b USD. In 2013, Russia gained 20 places in the yearly Doing Business Report of the World Bank, becoming one of the most dynamic coutries among the BRICS.

Although FDI flux had considerably increased since the beginning of the 2000s, their share in the GDP (1.5%) remains small given the country's growth and the potential fo the Russian economy. For the most part, these are circular investments. Although over the last few years, Russia has implemented positive economic reforms, the state's administrative problems, corruption and the uncertainties of the rule of law remain significant.

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