Russia

Economy

Salient Features: After years of double-digit declines, gross domestic product (GDP) shrank by only 4 percent in 1995. GDP per capita in 1995 US$4,224. Unemployment rising steadily, to estimated 8.5 percent in 1996; official Russian numbers about half that amount. Inflation, very high in 1994, under much better control under new government policy in 1995-96; April 1997 rate 1.2 percent. Economy increasingly dependent on foreign investment, multilateral loan agencies, and rescheduling of foreign debt. Privatization nearly complete but meeting political opposition to transformation of large state firms. Most prices determined by market. Role of organized crime significant, and much economic activity officially unaccounted for.

Agriculture: 6.3 percent of GDP in 1994. Major products grain, sugar beets, sunflower seeds, vegetables, fruits, meat, and milk.

Manufacturing: 28.3 percent of GDP in 1994. Principal products machine tools, rolling mills, high-performance aircraft, space vehicles, ships, road and rail transportation equipment, communications equipment, agricultural machinery, tractors and construction equipment, electric-power generating and transmitting equipment, medical and scientific instruments, and consumer durables.

Services: 50 percent of GDP in 1994. Tourism important source of foreign currency. Expansion of financial, communications, and information enterprises contributes to growth. Shipping services also major foreign-exchange earner.

Mining: Considerable mineral wealth, especially iron ore, copper, phosphates, manganese, chromium, nickel, platinum, diamonds, and gold. Production declined steadily 1990-95.

Energy: Russia self-sufficient in fuels and energy production. Natural gas and oil main fuels exploited, coal production declining but still significant; long-distance fuel transportation a significant problem. Main electricity sources: coal 18 percent, nuclear 13 percent, hydroelectric 19 percent, and natural gas 42 percent. Industry consumes 61 percent of energy production. Generation capacity 188 gigawatts. Energy exports most important source of foreign exchange.

Foreign Trade: Trade liberalization ongoing, abolishing export duties, restructuring import tariffs, and ending export registration in 1996. Main trading partners Germany, Italy, the Netherlands, Switzerland, Britain, the United States, Ukraine, Kazakstan, Belarus, China, and Japan. Exports for 1995 estimated at US$77.8 billion, imports US$57.9 billion. Balance of payments US$13.1 billion in 1995. Capital flight expected to drop to US$1 billion in 1996. Foreign investment strongly encouraged in some sectors, but unpredictable commercial conditions hinder growth. Outstanding Soviet-era debt by Third World countries, between US$100 and US$170 billion, could make Russia creditor country on balance.

Currency and Exchange Rate: Ruble. In July 1997, US$1 equaled 5,790 rubles.

Fiscal Year: Calendar year.