Russia Economic Outlook
Eastern Europe's powerhouse:
Russia is by far the largest and most populous economy in Eastern Europe, and has close trade ties with many members of the former Soviet bloc. Until the war in Ukraine, it was also a key provider of energy to the EU, though energy flows to the bloc have plummeted since 2022.
Energy superpower:Russia's economy is heavily reliant on its vast natural resources, particularly in energy. It is one of the world's largest producers of oil and natural gas, which are major contributors to its GDP and export earnings. This reliance makes its economy vulnerable to fluctuations in global commodity prices.
A global granary:Agriculture in Russia benefits from vast land resources, with significant production of wheat, barley, and other grains. The sector has seen growth and modernization in recent years, although it is hindered by sometimes adverse climatic conditions and infrastructure limitations.
Dismal demographics:Russia's population has been falling since 2018 amid a low birth rate and limited attractiveness to expats, with the decline accelerating since the outset of the Ukraine war. The population is expected to continue to decline until at least 2028.
War-related disruption:Since Russia invaded Ukraine in 2022, ties with the West—already hurt by Russia's annexation of Crimea in 2014—have deteriorated, and Russia has been hit by Western sanctions. Moreover, the war has disrupted economic activity, led to the withdrawal of foreign firms and caused a decline in the population due to high casualties and men fleeing conscription. However, the Russian economy has weathered Western sanctions much better than initially expected, thanks to high energy prices and the nation's ability to find new buyers for its exports, particularly in Asia.
Russia's economic outlook:Economic prospects are fairly grim due to international isolation, corruption and weak demographics. Growth is seen averaging only slightly above 1% in the long term, well below the Commonwealth of Independent States' average.
Russia's Macroeconomic Analysis:
Nominal GDP of USD 2,193 billion in 2022.
Nominal GDP of USD 2,012 billion in 2023.
GDP per capita of USD 13,751 compared to the global average of USD 10,589.
GDP per capita of USD 15,287 compared to the global average of USD 10,589.
Average real GDP growth of 1.1% over the last decade.
Average real GDP growth of 1.2% over the last decade.
Sector Analysis
In 2021, services accounted for 63% of overall GDP, manufacturing 14%, other industrial activity 19%, and agriculture 4%. Looking at GDP by expenditure, private consumption accounted for 50% of GDP in 2021, government consumption 18%, fixed investment 22%, and net exports 10%.International trade
In 2020, manufactured products made up 21% of total merchandise exports, mineral fuels 42%, food 8%, ores and metals 9% and agricultural raw materials 2%, with other categories accounting for 18% of the total. In the same period, manufactured products made up 79% of total merchandise imports, mineral fuels 1%, food 12%, ores and metals 3% and agricultural raw materials 1%, with other goods accounting for 4% of the total. Total exports were worth USD 592 billion in 2022, while total imports were USD 277 billion.Main Economic Indicators
Economic growthOver the last decade, Russia's GDP growth experienced fluctuations due to geopolitical tensions, sanctions, and oil price volatility. The economy contracted in 2015-2016 due to declining oil prices and the impact of sanctions linked to the annexation of Crimea, recovering slightly thereafter. COVID-19 brought another downturn in 2020, which was followed by the imposition of Western sanctions in 2022 following Russia's invasion of Ukraine. That said, Russia has performed much better than expected since Ukraine-related sanctions were introduced, thanks to strong government spending on the war effort, fiscal handouts, and the ability to reroute exports to Asia. To read more about GDP growth in Russia, go to our dedicated page.
Fiscal policy
Russia's fiscal situation over the last decade was heavily influenced by oil prices and geopolitical events. Despite facing sanctions, the pandemic and periods of low oil prices, the government managed to keep fiscal deficits manageable, and even ran budget surpluses in some years. Find out more on our dedicated page.
Unemployment
Russia's unemployment rate over the last decade was generally on a downward trend, though the pandemic in 2020 caused a temporary spike. The rate fell to a multi-decade low in 2023, due to emigration, strong domestic demand, population ageing and decline, and mobilization of men for the war in Ukraine. For more information on Russia's unemployment click here.
Inflation
Over the last decade, Russia experienced high inflation, often exceeding 5%. The country's inflation rate was significantly influenced by geopolitical tensions, economic sanctions, currency volatility and fluctuations in global commodity prices. Inflation pulled back notably in 2023 though, due to aggressive rate hikes by the Central Bank. Go to our Russia inflation page for extra insight.
Monetary Policy
Russia's central bank policy rates over the last decade saw significant fluctuations, influenced by economic sanctions, oil price volatility, and inflationary pressures. In the run-up to and during the COVID-19 pandemic, rates were reduced to support the economy. By 2022, rates were again increased in response to inflation concerns and geopolitical tensions following war in Ukraine. See our Russia monetary policy page for additional details.
Exchange Rate
The Russian Ruble experienced significant volatility over the last decade, but has generally been on a depreciatory trend as a result of increasing international isolation and the imposition of multiple rounds of Western sanctions. For more info on the ruble, click here.
Economic situation in Russia
A preliminary reading showed the economy expanded 3.1% annually in Q3 (Q2: +4.1% yoy), surprising markets and the Central Bank on the downside. Monthly data points to a broad-based slowdown, with industrial output, retail sales and goods exports losing steam. Shifting to Q4, our panel has penciled in another economic slowdown. Early data suggests domestic demand remained sluggish. In October, headline inflation remained entrenched above target, driving the Central Bank to hike its policy rate to a new all-time high. In other news, the U.S. recently imposed new sanctions on entities suspected of facilitating Russian sanctions circumvention, as well as on around 50 Russian banks, including Gazprombank; restrictions on the latter prevent it from handling energy-related transactions that pass through the U.S. financial system, prohibit its trade with the Americas and freeze its U.S. assets.Russia Economic Forecasts
Projections out to 2034.54 indicators covered including both annual and quarterly frequencies.
Consensus Forecasts based on a panel of 36 expert analysts.
Want to get insight on the economic outlook for Russia in the coming years? FocusEconomics collects projections out to 2034 on 54 economic indicators for Russia from a panel of 36 analysts at the leading national, regional and global forecast institutions. These projections are then validated by our in-house team of economists and data analysts, and averaged to provide one Consensus Forecast you can rely on for each indicator. This means you avoid the risk of relying on out of date, biased or outlier forecasts. Our Consensus Forecasts can be visualized in whichever way best suits your needs, including via interactive online dashboards , direct data delivery and executive-style reports which combine analysts' projections with timely written analysis from our in-house team of economists on the latest developments in the Russia economy. To download a sample report on the Russia's economy, click here. To get in touch with our team for more information, fill in the form at the bottom of this page.
Russia Economic Indicators
Q&A:
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How big is the Russian economy?
Russia's economy contracted significantly following the country's full-scale invasion of Ukraine in 2022 and the subsequent imposition of Western sanctions. The sanctions have impacted Russia's energy exports, financial sector, and access to technology. That said, economic activity has since recovered.
The Russian economy faces an uncertain future, influenced by deteriorating population dynamics, sanctions, the Ukraine war, and global economic conditions. Modest growth is expected in the near term, but risks abound; tighter sanctions or escalating conflict could lead to renewed economic contraction.
As of 2023, Russia's economy is forecast to be among the largest in the world by nominal GDP, with a value of approximately USD 1.9 trillion. Russia remains a significant economic power with a strong resource base and a diversified economy. However, the ongoing war in Ukraine and Western sanctions will weigh on GDP growth ahead.