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| Russian
Federation |
| Economic
Overview |
| Key
Economic Indications |
| Gross
National Product (GNP) |
US$
350,030 million (1996) |
| GNP Growth |
Not Available |
| GNP
per capita |
US$
2,410 (1996) |
| GDP |
US$ 276.6 billion (1998) |
| Sector
Shares on Percentages of GDP in 1996 |
| Agriculture and forestry |
7% |
| Industry |
39% |
| Services |
49.4% |
| GDP growth rate |
4.6% (1998) |
| GDP per capita |
US$ 1,888 (1998) |
| Foreign Investments |
US$ 11.8 billion (1998) |
| Balance of payment |
US$ 157,639 million
(1996) |
| Exchange rate |
US$
1 = Rubles 23.23 (Feb 1999)
Lending rate - 146.8% (in 1996)
Deposit rate - 55.1% (in 1996) |
| Interest rates |
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| Inflation |
11.0% (1997), 84.4%
(1998) |
| Total external debts |
US$ 124,785 million
(1996) |
| Debt service ratio |
6.6% value of exports
of goods and services in 1996 |
| Employment |
Total workforce - 73
million (in 1996), Unemployment rate - 9.1% of labour force
(i.e., 6.53 mn people in 1996, with considerable number under-employed) |
Economic Affairs
Major Agriculture Sectors
Grain, sugar beets, sunflower, seeds, meat, dairy products
Russia has relatively little area suited for agriculture because of
its arid climate and inconsistent rainfall. Northern areas concentrate
mainly on livestock and Southern parts and Western Siberia produce
grain. Private farms and garden plots of individuals account for more
than one-half of all agriculture production.
Major Industry Sectors
There is a complete range of manufacture, with automobiles, trucks,
trains, agricultural equipment, advanced aircrafts, aerospace machines
and equipment, mining and extractive industry, medical and scientific
instruments and construction equipment. Russia is one of the most
industrialized countries in CIS. Besides its resource-based industries,
it has developed large manufacturing capacities, notably in machinery.
Trade
Germany is Russia's largest trading partner, followed by Ukraine and
the United States. Trade with other CIS states is in energy and industrial
products, and in many instances is conducted by barter. Fairly healthy
trade surpluses ($ 36.8 billion in 1997) eroded over the course of
1998. Imports to Russia grew by 10-15% per year in 1995-97, as consumers
benefited from an appreciating ruble and a rising average wage failing,
due in particular to sharply lower prices for oil and gas (accounting
for 43% of merchandise exports in 1997). Moreover, Russia's manufactured
exports compete poorly on the world market, especially since Asian
goods have become less expensive following steep currency devaluations.
The recent devaluation of the ruble and difficulties in completing
transactions through the Russian banking system has reduced imports
substantially. The combination of import duties, a 20% value-added
tax, excise taxes on imported goods (especially automobiles, alcoholic
beverages and aircraft) and an import-licensing regime for alcohol,
further restrain the demand for imports. Frequent changes in customs
regulations have created problems for foreign and domestic traders
and investors.
|
1992 |
1993 |
1994 |
| Tourist arrivals ('000) |
3,009 |
5,896 |
4,643 |
| Tourist receipts (US$
mn) |
752 |
1,474 |
1,161 |
Investment
Russia observed a sharp increase in total investments between 1996
and 1997, with an increase of $ 6.5 to 10.7 billion, direct foreign
investment in government securities in 1997. Non-resident investors
are estimated to hold about 30 percent of the government securities
market.
Current Russian foreign investment regulations and notification requirements
are seen to be confusing and contradictory. The Ministry of Finance,
local authorities and/or various central government bodies, all register
foreign investments, depending on the particular industry concerned.
Prior approval is required for investments in new enterprises using
assets of existing Russian enterprises, foreign investment in defence
industries (which may be prohibited in some cases), investment in
the exploitation of natural resources and all investments over 50
million rubles. Projects involving large-scale construction for modernization
may also be subject to expert examination for environmental considerations.
In sectors, which require licensing (e.g. banking, mining and telecommunications),
procedures can be lengthy and opaque. Although the situation has improved
over the past few years, foreigners encounter significant restrictions
on ownership of real estate in some cities and regions in Russia.
Membership in Free Trade Arrangements
Russia does not participate currently in any free trade arrangements,
although it is attempting to finalize a customs union with members
of the CIS. Russia, who has an association agreement with the European
Union (effective December 1997), proposes to join the World Trade
Organization, and currently receives MFN treatment and GSP status
from the United States. |
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