Macroeconomic Development of Russia

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Russia
RussiaRussia
World economic rank 12. (nominal)
6. (PPP)
currency Russian ruble (RUB)
Conversion rate 1 EUR = 73.98 RUB
(as of July 6, 2018)
Trade
organizations 		WTO
Key figures
Gross domestic
product (GDP) 		$ 1,527 billion (nominal) (2017)
$ 4,008 billion ( PPP ) (2017)
GDP per capita $ 8,643 (nominal) (2017)
$ 27,834 (PPP) (2017)
GDP by economic sector Agriculture : 1.1%
Industry : 36.6%
Services : 62.3% (2017)
growth   1.8% (2017)
inflation rate 4.2% (2017)
Gini index 41.2 (2015)
Employed 76.53 million (2017)
Employed persons by economic sector Agriculture : 1.8% (2016)
Industry : 35.6% (2016)
Services : 62.6% (2016)
Activity rate 63.5% (2017)
Unemployment rate 5.5% (2017)
Foreign trade
export $ 336.8 billion (2017)
Export partner Netherlands : 10.6%
China : 9.3%
Germany : 9.2%
Turkey : 4.5%
Italy : 4.4% (2016)
import $ 212.7 billion (2017)
Import partner China : 16.6%
Germany : 16.0%
USA : 6.3%
France : 4.8%
Italy : 4.4% (2016)
Foreign trade balance $ 124.1 billion (2016)
public finances
Public debt 11.8% of GDP (2017)
Government revenue $ 253.9 billion (2017)
Government spending $ 287.5 billion (2017)
Budget balance −2.6% of GDP (2017)
The articles Economic Policy of Russia and Macroeconomic Development of Russia thematically overlap. Help me to better differentiate or merge the articles (→  instructions ) . To do this, take part in the relevant redundancy discussion . Please remove this module only after the redundancy has been completely processed and do not forget to include the relevant entry on the redundancy discussion page{{ Done | 1 = ~~~~}}to mark. Karsten11 ( discussion ) 16:49, Jun. 8, 2017 (CEST)

The overall economic development of Russia after the dissolution of the Soviet Union was initially characterized by a drastic collapse in production. The loss of well-established trade relations within the Soviet Union contributed to this. The transition from a planned economy to a market economy was difficult and only succeeded in some areas.

Since overcoming the financial crisis in 1998 , the Russian economy has grown again at rates between 4.7 and 10% up to and including 2008.

However, it has remained largely dependent on the development of energy and raw material prices on the world markets. Energy and raw material prices determine in particular the development of export earnings and government revenues. The desired diversification of production has so far not made great progress. The Russian economy only produces finished products that are competitive in international markets in a few areas, such as the armaments industry.

The Russian economy has also become increasingly dependent on international developments in the area of ​​international capital movements. In 2008 this was shown by the effects of the global financial crisis that began in the USA on Russia. Financial assets were withdrawn from Russia. Within half a year, share prices in Russia plummeted by almost 80%. Taking out loans abroad became drastically more expensive for Russian companies, if it was still possible.

As a result of the global economic downturn caused by the international financial crisis, growth slowed to 5.6% in 2008, according to the OECD , and fell temporarily after the oil price slump in 2009.

In the Global Competitiveness Index , which measures a country's competitiveness, Russia ranks 38th out of 137 countries (as of 2017/18). In 2017, the country ranks 114th out of 180 countries in the index of economic freedom .

Looking back from 1989 to 1997: production slump after the dissolution of the Soviet Union

After the dissolution of the Soviet Union and the collapse of the planned economy at the end of the 1980s, overall economic production in Russia fell year after year from 1990 to 1996. Overall, the gross domestic product decreased by around 40 percent.

Gross domestic product of Russia
(change compared to the previous year in percent and comparison with 1990)
Fiscal year 1989 1990 1991 1992 1993 1994 1995 1996 1997
Change compared to previous year (real) 1.6% - 3.0% - 5.0% - 14.5% - 8.7% - 12.7% - 4.0% - 3.6% 1.4%
Compared to 1990 (1990 = 100%) 103.1% 100.0% 95.0% 81.2% 74.2% 64.7% 62.1% 59.9% 60.7%

When there were signs of recovery in 1997/1998, oil prices collapsed . Russia had to stop servicing its national debt and abandon the dollar peg of the ruble.

Recovery after the 1998 financial crisis

From this financial crisis, which peaked in the summer of 1998 with the devaluation of the ruble, the Russian economy recovered faster than many had expected. On the one hand, it was helped by the depreciation of domestic production costs compared to other countries. In addition, the price of oil rose.

Economic policy reforms by the new President Putin , in particular his tax reform , also had a positive effect . It combined a low corporate profit taxation and a low income tax for natural persons with a skimming off of export earnings, which are based on oil price increases. Because, in contrast to previous years, the state's financial policy resisted the temptation to finance spending programs with the increasing tax revenues, it was possible to repay national debts and reduce the interest burden on the budget.

The Russian gross domestic product has increased between 5 and 10% annually since 1999. But it wasn't until 2007 that the slump in production suffered after the dissolution of the Soviet Union was evened out. After an increase in the gross domestic product of 8.1%, the production level of 1989 was just exceeded.

Gross domestic product of Russia
(change compared to the previous year in percent and comparison with 1990)
year 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Change compared to previous year (real) −5.3% 6.4% 10.0% 5.1% 4.7% 7.3% 7.2% 6.4% 8.2% 8.5% 5.2% −7.8% 4.0%
Compared to 1990 (1990 = 100%) 57.5% 61.2% 67.3% 70.7% 74.1% 79.5% 85.2% 90.7% 98.1% 106.5% 112.0% 103.2% 107.3%

Strong oil price increase from 2004 to 2008

From 2004 to 2008, the steady sharp rise in the oil price in particular shaped the overall economic development in Russia. On average over the year, the price of Russian Urals oil rose from around 35 to around 94 US dollars / barrel.

The rise in the price of oil drove up Russia's export earnings and resulted in record surpluses in the trade and current account. The currency reserves rose steadily. High oil prices enabled large surpluses in the state budget thanks to strong increases in income. The observation frequently made in earlier years that a sharp rise in the price of oil would lead to a significant acceleration in economic growth in Russia has not been confirmed in recent years. The increase in overall economic production has stagnated since 2004 with minor fluctuations at a high level of around 7%.


December consumer price increase compared to December of the previous year in%
year 2002 2003 2004 2005 2006 2007 2008 2009 2010
15.1 12.0 11.7 10.9 9.0 11.9 13.3 8.8 8.8

According to most experts, the influx of foreign exchange triggered by high oil prices is slowing down the will for economic policy reforms. On the contrary, abundant flow of government revenues led to a relaxation of budgetary policy and the distribution of “election gifts” before the Duma and presidential elections in December 2007 and March 2008.

Economic growth until 2008

Production of selected products
Product Type 2005 2011
Iron ores 82.5 million t 100 million tons
coal 299 million tons 335 million tons
Pig iron 66.2 million t 48.1 million t
oil 470 million tons 511 million tons
natural gas 641 million m³ 670 million m³
cement 48.7 million t 53.7 million t (2008)
Car 1.068 million pcs. 1.738 million pcs.
truck 0.204 million pcs. 0.249 million pcs.
Power generation 953 TWh 1052 TWh

In 2007 overall economic growth accelerated to 8.5%.

Since the summer of 2008, however, overall economic growth in Russia has also weakened significantly under the influence of the international financial crisis triggered by the real estate crisis in the USA and the collapse in demand on the raw material markets. In the 2008/2007 year-on-year comparison, there was significantly lower growth in overall economic production (+ 5.6%).

The increase in industrial production slowed to 2.1%. The oil production even fell by almost 1%. The natural gas recovered only slightly by 1.6%. The International Monetary Fund , IMF, has pointed to the uncertainty caused by the Yukos affair and the high tax burden on the oil sector as reasons for the weaker growth in the energy industry, which has persisted for several years . The World Bank also emphasized the growth-dampening effect of the real appreciation of the ruble and referred to capacity bottlenecks in the energy industry.

On the demand side, growth in 2008 was again driven solely by domestic demand. As has been the case for years, a strong contribution to growth came from the very sharp rise in private consumer spending , which rose by around 12%. In contrast, the longstanding investment boom subsided significantly in 2008. The growth in gross fixed capital formation fell by more than half to around 9%. There was still no contribution to growth from external developments. While exports stagnated in real terms, the real increase in imports still reached around 18%.

With rapidly falling export revenues and massive capital outflows, the ruble came under pressure and share prices collapsed. The Russian government attempted massive interventions to stabilize the securities markets and the exchange rate. The recovery in share prices in spring 2009 is more likely to be due to the international upward trend on the stock exchanges and the rise in oil prices.

Inflation and recession

In 2007, inflation, which was still very high in an international comparison, could not be depressed any further, but was almost 3 percentage points higher than in 2006 at just under 12%. In the opinion of the OECD, both financial and monetary and exchange rate policy contributed to this. For one thing, government spending rose sharply before the Duma and presidential elections. In addition, because of the currency purchases by the central bank to stabilize the ruble rate, the money supply grew very strongly. Added to this was the global rise in food prices.

In 2008, the rate of inflation accelerated to 13.3%, although economic growth slowed significantly in the second half of the year. The global increase in energy and raw material prices contributed to the higher price increase.

The goals pursued by the Russian government with its monetary and exchange rate policy, on the one hand to reduce inflation, which is very high in international comparison, and at the same time to keep the nominal exchange rate of the ruble to a currency basket of US dollars and euros constant and thus the real appreciation of the Braking rubles has been difficult to reconcile in recent years. If it tried to dampen the appreciation of the ruble by buying up foreign currencies in order to avoid an all too rapid deterioration in the price competitiveness of Russian companies on the world market, the money supply increased and with it the inflation potential.

The International Monetary Fund (IMF) has repeatedly urged the Russian central bank to make more determined efforts to lower inflation. In the interests of the stability goal, Russia should, if necessary, refrain from buying foreign currencies to limit the appreciation of the ruble.

From December 2007 to December 2008, real appreciation against the currency basket weakened to 4.3% (previous year: + 5.1%). The real appreciation that began in 1999 has meanwhile resulted in the real ruble exchange rate being slightly higher than it was before the financial crisis in summer 1998. The Russian export economy can no longer benefit from depreciation advantages.

In the course of the international financial crisis, however, the framework conditions for Russian exchange rate policy changed significantly in 2008. The ruble also came under depreciation pressure against the US dollar. Since autumn 2008, the central bank has allowed the ruble to devalue in small steps against the currency basket of US dollars and euros.

In addition, in 2009 the strong dependency of the exchange rate development on the oil price became apparent. As oil prices rose, the ruble appreciated again significantly from February to mid-June 2009. With the temporary renewed decline in oil prices below $ 60 / barrel, the ruble also came under devaluation pressure again.

State budget surpluses are dwindling

In 2006 the high oil prices and a moderate spending policy resulted in a record surplus of 8.4% of the gross domestic product in the national budget. In the 2007 election year, government spending was increased by almost a quarter. The surplus fell to 6.0% of GDP. In 2008 he could not hold himself at this level. Government revenues rose at a significantly slower rate than gross domestic product, and the surplus fell to 4.8% of GDP. In 2009, the OECD expected a deficit of around 6 percent of GDP due to the sharp drop in the price of oil since July 2008 and the collapse in growth in the Russian economy. She called for spending increases planned by the Russian government to be implemented quickly, in particular measures for social security against the crisis and an active labor market policy.

State budget surplus
as a percentage of gross domestic product
year 2005 2006 2007 2008 2009
7.7 8.4 6.0 4.8 - 6.0

In contrast, the IMF has repeatedly criticized Russian budgetary policy in recent years, among other things because social benefits were increased significantly in 2006 after the cancellation of social policy benefits in kind at the beginning of 2005 led to considerable protests by the population. At the beginning of October 2008, the IMF still demanded that fiscal policy should avoid any additional demand impulse.

Stabilization fund

The basic idea of ​​the stabilization fund set up in 2004 was that government spending should correspond to a certain oil price. Revenue that accrues to the state when this “threshold price” is exceeded is to be saved in the stabilization fund. If the oil price falls below the "threshold price", government spending is to be stabilized by withdrawing funds from the fund. In early 2006, the “threshold price” was raised from $ 20 to $ 27 per barrel of oil.

In August 2006, around US $ 23.5 billion was withdrawn from the fund to repay public foreign debt early. In 2005, all debts to the IMF had already been paid off ahead of schedule. In addition, by the end of August 2005, some $ 15 billion in debt to the Paris Club of Public Creditors had been repaid early. The use of the fund to repay government debts has the approval of the IMF, World Bank and OECD.

However, the OECD opposes demands to spend parts of the stabilization fund on social benefits. Such demands were made by members of the Russian parliament, among others. The Russian government decided to split the stabilization fund.

At the end of January 2008, the fund's holdings reached around 3,852 billion rubles (around $ 157 billion), or around 9% of gross domestic product. At the beginning of February 2008, the fund, which is now also fed from tax and customs revenues from the gas sector, was renamed the "Oil and Gas Fund". It consists of two funds:

  • The “reserve fund” is to include investments worth up to ten percent of Russia's gross domestic product. At the beginning of July 2009 it amounted to 2,958 billion rubles ($ 95 billion).
  • Any income that goes beyond this should flow into a new "Fund for National Wealth". At the beginning of July 2009, its inventory had reached 2,814 billion rubles (around 90 billion dollars).

As before, the reserve fund is to be invested in the stabilization fund with the aim of achieving the greatest possible security. In the event of a sharp drop in oil prices, however, government spending can be financed through the reserve fund. This option will be used in 2009. Between the beginning of the year and the beginning of July, the fund's ruble holdings fell by a good quarter.

The investment of the funds of the “prosperity fund”, on the other hand, should be riskier in order to achieve higher returns.

Government external debt

The Russian state has fully met its international debt obligations in recent years and has significantly reduced its foreign debt. The federal government's external debt continued to fall to $ 26 billion by the end of June 2009 (around 2% of GDP). In view of the still abundant currency reserves, the financing of debt servicing poses no difficulties.

On the other hand, Russian companies have increasingly taken out loans on the international capital markets. This was u. a. because of the relatively high financing costs at Russian banks, abroad the lending rates were lower. The total Russian foreign debt, including the debt of the private sectors abroad, rose to 541 billion US dollars by the end of September 2008 (almost a third of Russia's gross domestic product). At the end of June 2009 they were still around 475 billion US dollars. Refinancing these foreign loans has become increasingly difficult for Russian companies in the wake of the international financial crisis. They too are suffering from the “ credit crunch ”.

Third highest currency reserves in an international comparison

The currency reserves increased in 2007 by around 57% to around 476 billion US dollars. In early August 2008, just before the war with Georgia, they peaked at almost $ 600 billion. Due to the outflow of capital in the wake of the international financial crisis, however, by March 20, 2009, they had fallen by a good third to around 385 billion US dollars. In mid-July they were around $ 400 billion. This means that Russia still has the third highest currency reserves in an international comparison. Only China and Japan have higher currency reserves. Since the Russian currency reserves are now higher than the state foreign debt, Russia is now a net creditor to the rest of the world.

Rating of Russia as a borrower

Many institutional investors are only allowed to buy "investment grade" bonds due to their investment guidelines.

Of the three leading rating agencies , Moody's , Fitch Ratings and Standard & Poor's , at the beginning of April 2009 only Moody's awarded the Russian state the third-lowest so-called " investment grade " for long-term borrowing in foreign currency . In view of the worsening economic situation, Fitch Ratings lowered its rating to the second lowest investment grade in February 2009. Standard & Poor's had already done this in December 2008. Fitch Ratings and Standard & Poor's also announced that they consider a downgrade of Russia more likely than an upgrade by reducing their so-called “outlook” to “negative”. The high costs of stabilizing the Russian financial system, increasing capital outflows and an impending budget deficit in 2009 were named as negative factors.

Foreign trade and current account

In 2008, foreign trade was dominated by the sharp rise in oil prices up to July. The Ural oil price was an annual average of $ 93.9 / barrel around 35% higher than in the previous year. In terms of value, exports grew faster (+ 33%) than imports (+ 31%). The trade surplus ($ 180 billion) was 37.3% higher than in 2007.

Energy export revenues rose by an above-average 42% in 2008 (crude oil: + 32%, products: + 53%, natural gas: + 54%). The share of exports of crude oil, mineral oil products and natural gas in exports of goods rose to around 66%. It was significantly higher than in 2007 (62%).

The surplus in the Russian current account , which in addition to trade in goods also includes trade in services and the exchange of free services, was around a third higher in 2008 at around $ 102 billion than in the previous year (around $ 77 billion). The rise in oil prices (+ 35% on an annual average in 2008) contributed to this.

In the first half of 2009, the Ural oil price of $ 50.5 / barrel was around 52% below the level in the first half of 2008. The trade and current account surpluses fell significantly.

The trade surplus was $ 43.2 billion, around 57% lower than a year ago. Exports fell even faster (- 47%) than imports (- 39%).

According to estimates by the central bank, revenues from the export of crude oil, mineral oil products and natural gas totaled around 77 billion US dollars, around 52% lower than in the first half of 2008 (crude oil: -53%; mineral oil products: -51%; natural gas: -50 %). The share of energy in exports fell to 61% (1st half of 2008: 67%). In 2009, the OECD expects the surplus to decrease significantly to 3.3% of GDP. Deutsche Bank / UFG is even anticipating a deficit of around $ 45 billion (around 3% of GDP) if oil prices remain low.

Current account balance
in% of gross domestic product
year 2005 2006 2007 2008 2009
11.0 9.5 5.9 6.1 3.3

Germany's largest trading partner

The most important trading partner for Russia is Germany - both as a customer and as a supplier. Russia supplies Germany almost exclusively with energy and other raw materials (metals, chemical raw materials). In contrast, German exports to Russia are predominantly finished goods (shares in 2007: machines 24%, motor vehicles 17%, electrotechnical products and electronics 16%).

In 2008 German imports from Russia increased by around 25% to 35.9 billion euros. The oil price, which was around a third higher on average, contributed to this.

At the same time, German exports to Russia only rose by around 5% and reached 32.3 billion euros. German companies are particularly successful on the Russian market in the important sectors of motor vehicles, machines and systems, building materials, furniture and agricultural products.

The German deficit in the bilateral trade balance rose in 2008 to 3.6 billion euros.

See also

literature

Russian

English

Web links

Individual evidence

  1. ↑ Gross domestic product 2016 (PPP) (PDF; 14 kB) In: The World Bank: World Development Indicators database . World Bank. February 3, 2017. Retrieved February 5, 2018.
  2. ↑ [1] Retrieved January 29, 2018
  3. ↑ [2] Retrieved January 29, 2018
  4. ↑ [3] Retrieved January 29, 2018
  5. ↑ [4] Retrieved January 29, 2018
  6. ↑ [5] Retrieved January 29, 2018
  7. ↑ [6] Retrieved January 29, 2018
  8. ↑ Employment rate in a country comparison. Federal Statistical Office , October 10, 2016, accessed on December 4, 2016 .
  9. ↑ [7] Retrieved January 29, 2018
  10. ↑ [8] Retrieved January 29, 2018
  11. ↑ [9] Retrieved January 29, 2018
  12. ↑ [10]
  13. ↑ [11] Retrieved January 29, 2018
  14. ↑ [12] Retrieved January 29, 2018
  15. ↑ destatis.de: Financial balance of the state of Germany, gross domestic product 2013 for Germany - accompanying material for the press conference on January 15, 2014, table 3, page 21
  16. ↑ a b Source: EBRD Economic Statistics ( Memento of the original from June 14, 2007 in the Internet Archive ) Info: The archive link was inserted automatically and has not yet been checked. Please check the original and archive link according to the instructions and then remove this notice. ; Rosstat @1@ 2Template: Webachiv / IABot / www.ebrd.com
  17. ↑ a b c Source: OECD: Economic Outlook
  18. ↑ Iron and Steel. - Download ppt video online. Retrieved December 20, 2018 .
  19. ↑ a b OICA: 2011 Production statistics , accessed April 8, 2012.