Real Estate In Russia

The economy of Russia is an emerging and developing, high-income, industrialized, mixed market-oriented economy.
—Rosefielde, Steven, and Natalia Vennikova. "Fiscal Federalism in Russia: A Critique of the OECD Proposals". '' Cambridge Journal of Economics'', vol. 28, no. 2, Oxford University Press, 2004, pp. 307–18, .

—Robinson, Neil. "August 1998 and the Development of Russia's Post-Communist Political Economy". ''Review of International Political Economy'', vol. 16, no. 3, Taylor & Francis, Ltd., 2009, pp. 433–55, .

—Charap, Samuel. “No Obituaries Yet for Capitalism in Russia". ''Current History'', vol. 108, no. 720, University of California Press, 2009, pp. 333–38, .

—Rutland, Peter. "Neoliberalism and the Russian Transition". ''Review of International Political Economy'', vol. 20, no. 2, Taylor & Francis, Ltd., 2013, pp. 332–62, .

—Kovalev, Alexandre, and Alexandre Sokalev. "Russia: Towards a Market Economy". ''New Zealand International Review'', vol. 18, no. 1, New Zealand Institute of International Affairs, 1993, pp. 18–21, .

—Czinkota, Michael R. "Russia's Transition to a Market Economy: Learning about Business". ''Journal of International Marketing'', vol. 5, no. 4, American Marketing Association, 1997, pp. 73–93, . It has the eleventh-largest economy in the world by nominal GDP and the fourth-largest economy by GDP ( PPP). Due to a volatile currency exchange rate, its GDP measured in nominal terms fluctuates sharply. Russia was the last major economy to join the World Trade Organization (WTO), becoming a member in 2012.

Russia has large amounts of energy resources throughout its vast landmass, particularly natural gas and petroleum, which play a crucial role in its energy self-sufficiency and exports. The country has been widely described as an energy superpower; with it having the largest natural gas reserves in the world, the second-largest coal reserves, the eighth-largest oil reserves, and the largest oil shale reserves in Europe. Russia is the world's leading natural gas exporter, the second-largest natural gas producer, the second-largest oil exporter and producer, and the third-largest coal exporter. Its foreign exchange reserves are the fifth-largest in the world. Russia has a labour force of about 73 million people, which is the eighth-largest in the world. It is the third-largest exporter of arms in the world. The large oil and gas sector accounted up to 30% of Russia's federal budget revenues in 2024, down from 50% in the mid-2010s, suggesting economic diversification.

Russia's human development is ranked as "very high" in the annual Human Development Index. Roughly 70% of Russia's total GDP is driven by domestic consumption, and the country has the world's twelfth-largest consumer market. Its social security system comprised roughly 16% of the total GDP in 2015. Russia has the fifth-highest number of billionaires in the world. However, its income inequality remains comparatively high, caused by the variance of natural resources among its federal subjects, leading to regional economic disparities. High levels of corruption, a shrinking labor force, and an aging and declining population also remain major barriers to future economic growth.

Following the 2022 Russian invasion of Ukraine, the country has faced extensive sanctions and other negative financial actions from the Western world and its allies which have the aim of isolating the Russian economy from the Western financial system. However, Russia's economy has shown resilience to such measures broadly, and has maintained economic stability and growth—driven primarily by high military expenditure, rising household consumption and wages, low unemployment, and increased government spending. Yet, inflation has remained comparatively high, with experts predicting the sanctions will have a long-term negative effect on the Russian economy.

History

The Russian economy has been volatile over the past multiple decades. After 1989, its institutional environment was transformed from a command economy based upon socialist organizations to a capitalistic system. Its industrial structure dramatically shifted away over the course of several years from heavy investment in manufacturing as well as in traditional Soviet agriculture towards free market related developments in natural gas and oil extraction in additional to businesses engaged in mining. A service economy also expanded during this time. The academic analyst Richard Connolly has argued that, over the last four centuries in a broad sense, there were four main characteristics of the Russian economy that have shaped the system and persisted despite the political upheavals. First of all the weakness of the legal system means that impartial courts do not rule and contracts are problematic. Second is the underdevelopment of modern economic activities, with very basic peasant agriculture dominant into the 1930s. Third is technological underdevelopment, eased somewhat by borrowing from the West in the 1920s. And fourth lower living standards compared to Western Europe and North America.

Russian Empire

Soviet Union

Beginning in 1928, the course of the Soviet Union's economy was guided by a series of five-year plans. By the 1950s, the Soviet Union had rapidly evolved from a mainly agrarian society into a major industrial power.
By the 1970s the Soviet Union was in an Era of Stagnation. The complex demands of the modern economy and inflexible administration overwhelmed and constrained the central planners. The volume of decisions facing planners in Moscow became overwhelming. The cumbersome procedures for bureaucratic administration foreclosed the free communication and flexible response required at the enterprise level for dealing with worker alienation, innovation, customers, and suppliers.

From 1975 to 1985, corruption and data manipulation became common practice within the bureaucracy to report satisfied targets and quotas, thus entrenching the crisis. Starting in 1986, Mikhail Gorbachev attempted to address economic problems by moving towards a market-oriented socialist economy. Gorbachev's policies of Perestroika failed to rejuvenate the Soviet economy; instead, a process of political and economic disintegration culminated in the breakup of the Soviet Union in 1991.

Transition to market economy (1991–1998)

Following the collapse of the Soviet Union, Russia underwent a radical transformation, moving from a centrally planned economy to a globally integrated market economy. Corrupt and haphazard privatization processes turned over major state-owned firms to politically connected " oligarchs", which has left equity ownership highly concentrated.

Yeltsin's program of radical, market-oriented reform came to be known as a " shock therapy". It was based on the policies associated with the Washington Consensus, recommendations of the IMF and a group of top American economists, including Larry Summers who in 1994 urged for "the three '-ations'—privatization, stabilization, and liberalization" to be "completed as soon as possible." With deep corruption afflicting the process, the result was disastrous, with real GDP falling by more than 40% by 1999, hyperinflation which wiped out personal savings, crime and destitution spreading rapidly. The jump in prices from shock therapy wiped out the modest savings accumulated by Russians under socialism and resulted in a regressive redistribution of wealth in favour of elites who owned non-monetary assets.

Shock therapy was accompanied by a drop in the standard of living, including surging economic inequality and poverty, along with increased excess mortality and a decline in life expectancy. Russia suffered the largest peacetime rise in mortality ever experienced by an industrialized country. Likewise, the consumption of meat decreased: in 1990, an average citizen of the RSFSR consumed 63 kg of meat a year; by 1999, it had decreased to 45 kg.

The majority of state enterprises were privatized amid great controversy and subsequently came to be owned by insiders for far less than they were worth. For example, the director of a factory during the Soviet regime would often become the owner of the same enterprise. Under the government's cover, outrageous financial manipulations were performed that enriched a narrow group of individuals at key positions of business and government. Many of them promptly invested their newfound wealth abroad, producing an enormous capital flight. This rapid privatization of public assets, and the widespread corruption associated with it, became widely known throughout Russia as "prikhvatizatisiya," or "grab-itization."

Difficulties in collecting government revenues amid the collapsing economy and dependence on short-term borrowing to finance budget deficits led to the 1998 Russian financial crisis.

In the 1990s, Russia was a major borrower from the International Monetary Fund, with loan facilities totalling $20 billion. The IMF was criticised for lending so much, as Russia introduced little of the reforms promised for the money and a large part of these funds could have been "diverted from their intended purpose and included in the flows of capital that left the country illegally".

On 24 September 1993, at a meeting of the Commonwealth of Independent States (CIS) Council of Heads of State in Moscow, Azerbaijan, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Moldova, Russia, Tajikistan, Uzbekistan signed the Treaty on the creation of an Economic Union which reinforces by an international agreement the intention to create an economic union through the step-by-step creation of a free trade area, a customs union and conditions for the free movement of goods, services, capital and labor. All these countries have ratified the Treaty and it entered into force on 14 January 1994. Turkmenistan and Georgia joined in 1994 and ratified the Treaty, but Georgia withdrew in 2009.

On 15 April 1994, at a meeting of the Commonwealth of Independent States (CIS) Council of Heads of State in Moscow, all 12 post-Soviet states signed the international Agreement on the Establishment of a Free Trade Area in order to move towards the creation of an economic union. Article 17 also confirmed the intention to conclude a free trade agreement in services. Article 1 indicated that this was "the first stage of the creation of the Economic Union", but in 1999 the countries agreed to remove this phrase from the agreement.
Russia concluded bilateral free trade agreements with all CIS countries and did not switch to a multilateral free trade regime in 1999. Bilateral free trade agreements, except for Georgia, Azerbaijan and Turkmenistan (all of these are in force as of 2024), ceased to apply only after 2012 with Russia's accession to the new multilateral CIS free trade area.

Further integration took place outside the legal framework of the CIS. Pursuant to the Treaty on the creation of an Economic Union, the Agreement on the Customs Union between the Russian Federation and the Republic of Belarus was signed on 6 January 1995 in Minsk. The Government of the Republic of Belarus and the Government of the Russian Federation, on the one side, and the Government of the Republic of Kazakhstan, on the other side, signed an Agreement on the Customs Union in Moscow on 20 January 1995 in order to move towards the creation of an economic union as envisaged by the treaty. The implementation of these agreements made it possible to launch the Customs Union of the Eurasian Economic Community in 2010. According to the database of international treaties of the Eurasian Economic Union, these agreements are still in force as of 2024 and apply in part not contrary to the Treaty on the Eurasian Economic Union.

International agreements such as the following have further deepened trade and economic relations and integration with Belarus. The Community of Belarus and Russia was founded on 2 April 1996. The "Treaty on the Union between Belarus and Russia" was signed on 2 April 1997. And finally the Treaty on the Creation of a Union State of Russia and Belarus was signed on 8 December 1999.

Recovery and growth (1999–2008)

Russia recovered quickly from the August 1998 financial crash, partly because of a devaluation of the ruble, which made domestic producers more competitive nationally and internationally.

Between 2000 and 2002, significant pro-growth economic reforms included a comprehensive tax reform, which introduced a flat income tax of 13%; and a broad effort at deregulation which benefited small and medium-sized enterprises.An Assessment of Putin's Economic Policy
, by Anders Aslund, Peterson Institute for International Economics, July 2008

Between 2000 and 2008, Russian economy got a major boost from rising commodity prices. GDP grew on average 7% per year. Disposable incomes more than doubled and in dollar-denominated terms increased eightfold. The volume of consumer credit between 2000 and 2006 increased 45 times, fuelling a boom in private consumption. The number of people living below poverty line declined from 30% in 2000 to 14% in 2008.

Russia repaid its borrowing of $3.3 billion from the IMF three years early in 2005.

Inflation remained a problem however, as the central bank aggressively expanded money supply to combat appreciation of the ruble. Nevertheless, in 2007 the World Bank declared that the Russian economy achieved "unprecedented macroeconomic stability". Until October 2007, Russia maintained impressive fiscal discipline with budget surpluses every year from 2000.

2009–2014

Russian banks were affected by the 2008 financial crisis, though no long term damage was done due to a proactive and timely response by the government and central bank. A sharp, but brief recession in Russia was followed by a strong recovery beginning in late 2009.

Between 2000 and 2012, Russia's energy exports fuelled a rapid growth in living standards, with real disposable income rising by 160%. In dollar-denominated terms this amounted to a more than sevenfold increase in disposable incomes since 2000. In the same period, unemployment and poverty more than halved and Russians' self-assessed life satisfaction also rose significantly. This growth was a combined result of the 2000s commodities boom, high oil prices, as well as prudent economic and fiscal policies.''Putin: Russia's Choice'', (Routledge 2007), by Richard Sakwa, Chapter 9 However, these gains have been distributed unevenly, as the 110 wealthiest individuals were found in a report by Credit Suisse to own 35% of all financial assets held by Russian households. Russia also has the second-largest volume of illicit money outflows, having lost over $880 billion between 2002 and 2011 in this way. Since 2008 Forbes has repeatedly named Moscow the "billionaire capital of the world".

In July 2010, Russia, together with Belarus and Kazakhstan, became a founding member of the Customs Union of the Eurasian Economic Community (EurAsEC), and the EurAsEC Single Economic Space, a common market of the same countries, came into force on 1 January 2012, superseding the bilateral agreements on free trade. At the same time Russia's membership to the WTO was accepted in 2011. Russia joined the World Trade Organization (WTO) on 22 August 2012 after 19 years of negotiations. On 20 September 2012, the multi-lateral Free Trade Area of the Commonwealth of Independent States (CIS FTA) came into force for Russia and subsequently superseded previous bilateral agreements among 9 participating post-Soviet states. In 2015, Russia became a founding member of the Eurasian Economic Union (EAEU), which replaced EurAsEC and envisaged a supranational economic union (the deepest stage of economic integration).

Rapid GDP and income growth continued until 2013. The most important topic of discussion in the economy for a decade was the middle-income trap. In 2013, the World Bank announced that Russia had graduated to a high-income economy based on the results of 2012 but in 2016 it was reclassified as an upper-middle income economy due to changes in the exchange rate of the Russian ruble, which is a floating currency. While the UN Human Development Index, which assesses progress in the standard of living, health and education, ranks Russia among the ' very high human development' countries.

Russian leaders repeatedly spoke of the need to diversify the economy away from its dependence on oil and gas and foster a high-technology sector. In 2012 oil, gas and petroleum products accounted for over 70% of total exports. This economic model appeared to show its limits, when after years of strong performance, the Russian economy expanded by a mere 1.3% in 2013. Several reasons were proposed to explain the slowdown, including a prolonged recession in the EU, which is Russia's largest trading partner, stagnant oil prices, lack of spare industrial capacity and demographic problems. Political turmoil in neighbouring Ukraine added to the uncertainty and suppressed investment.

2014–2021

Following the annexation of Crimea in March 2014 and Russia's involvement in the ongoing War in Donbas, the United States, the European Union, Canada, and Japan imposed sanctions on Russia. This led to the decline of the Russian ruble and sparked fears of a Russian financial crisis. Russia responded with sanctions against a number of countries, including a one-year period of total ban on food imports from the European Union and the United States.

According to the Russian economic ministry in July 2014, GDP growth in the first half of 2014 was 1%. The ministry projected growth of 0.5% for 2014. The Russian economy grew by a better than expected 0.6% in 2014. Russia is rated one of the most unequal of the world's major economies.

As a result of the World Bank's designation of a high-income economy, Barack Obama issued a proclamation 9188: "I have determined that Russia is sufficiently advanced in economic development and improved in trade competitiveness that it is appropriate to terminate the designation of Russia as a beneficiary developing country effective October 3, 2014." U.S. Customs and Border Protection (CBP) indicated that Russia formally graduated from the GSP program on 4 October 2014.

As of 2015, real income was still lower for 99% of Russians than it was in 1991.

The Russian economy risked going into recession from early 2014, mainly due to falling oil prices, sanctions, and the subsequent capital flight. While in 2014 GDP growth remained positive at 0.6%, in 2015 the Russian economy shrunk by 3.7% and was expected to shrink further in 2016. By 2016, the Russian economy rebounded with 0.3% GDP growth and officially exited recession. The growth continued in 2017, with an increase of 1.5%.

In January 2016, Bloomberg rated Russia's economy as the 12th most innovative in the world,These Are the World's Most Innovative Economies
Bloomberg Business. up from 14th in January 2015 and 18th in January 2014. Russia has the world's 15th highest patent application rate, the 8th highest concentration of high-tech public companies, such as internet and aerospace and the third highest graduation rate of scientists and engineers.

According to the British company BP (Statistical Yearbook 2018), proven oil reserves in Russia at the end of 2017 were , natural gas was . Gold reserves in Russia's subsoil, according to the U.S. Geological Survey, were at the end of 2017.

In 2019, the Ministry of Natural Resources estimated the country's mineral reserves in physical terms. At the end of 2017, oil reserves were , gas reserves were , gold reserves were , and diamonds reserves were . Then for the first time the Ministry evaluated the mineral reserves of Russia in terms of value. The value of oil reserves amounted to 39.6 trillion rubles, the value of gas amounted to 11.3 trillion rubles, coking coal amounted to almost 2 trillion rubles, iron ore amounted to 808 billion rubles, diamonds amounted to 505 billion rubles, gold amounted to 480 billion rubles. The combined value of all mineral and energy resources (oil, gas, gold, copper, iron ore, thermal and lignite coal, and diamonds) amounted to 55.24 trillion rubles (US$844 billion), or 60% of GDP for 2017. The assessment occurred after the adoption of a new classification of reserves in Russia and the object of the methodology was only those fields for which a license was issued, so the assessment of the Ministry of Natural Resources is less than the total volume of explored reserves. Experts criticized such "an unsuccessful attempt to estimate reserves," pointing out that "one should not take such an estimate seriously" and "the form contains an incorrect formula for calculating the value".

In the International Comparison Program 2021, the Commonwealth of Independent States (CIS) region was linked through the standard global core list approach, unlike in ICP 2017. Based on the results, the World Bank announced that in 2021 Russia was the 4th largest economy in the world ($5.7 trillion and 3.8 percent of the world) and the largest economy in Europe and Central Asia when measured in PPP terms.https://thedocs.worldbank.org/en/doc/0274411350395ce53ccd3e91a431e924-0050022024/original/FINAL-ICP-2021-Global-and-regional-highlights.pdf

2022–present

In 2022, heavy sanctions were enacted due to the Russian invasion of Ukraine which will likely result in a steep recession. Since early 2022, many official economic statistics have not been published. Sanctions also included asset freezes on the Russian Central Bank, which holds $630 billion in foreign-exchange reserves, to prevent it from offsetting the effects of sanctions.

According to most estimates, every day of the war in Ukraine costs Russia $500 million to $1 billion.

On 27 June 2022, Russia defaulted on part of its foreign currency, its first such default since 1918.

In November 2022, it was reported that Russia had officially entered a recession as the Federal State Statistics Service had reported a national GDP loss for the second consecutive quarter.

As part of the sanctions imposed on Russia, on 2 September 2022, the finance ministers of the G7 group agreed to cap the price of Russian oil and petroleum products, designed to allow Russia to maintain production, but limiting revenue from oil sales.

In 2022, ''The Economist'' calculated that Russia did graduate into the category of high-income economies by 2022, if counted at purchasing power parity rather than the exchange rate but could fall below the threshold due to the invasion of Ukraine. In December 2022, a study at Bank of Russia's Research and Forecasting Department, found that the import dependence of the Russian economy is relatively low, does not exceed the median for other countries, and the share of imports in most industries is lower than in other countries. The key explanation for this could be the low involvement of the Russian economy in global value supply chains and its focus on production of raw materials. However, 60% of Russia's imports come from the countries that have announced sanctions against Russia.

TASS reported poor results for the Russian economy the first quarter of 2023 with revenue of 5.7 trillion roubles – down 21% (mainly due to falling oil revenue), expenditure 8.1 trillion roubles – up 34% (mainly due to increased military costs), creating a deficit 2.4 trillion roubles – ($29.4 billion)

Following Central Bank of Russia interventions, the exchange rate of the rouble against the dollar remained relatively stable in 2022, although in 2023 it started to decrease significantly, reaching RUB 97 per USD 1 on 15 August 2023. Both the interventions and the exchange rate decrease resulted in significant criticism of the Central Bank by Russian state propaganda. Quarter 2 of 2023 saw a 13% fall in the value of the rouble against the dollar and a current account surplus estimated in to be falling by 80% from the annual 2022 surplus of $233 billion.

After 11 years of negotiations, on 8 June 2023, in Sochi, Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, Tajikistan and Uzbekistan signed the Commonwealth of Independent States Agreement on Free Trade in Services, Establishment, Operations and Investment to partly integrate Uzbekistan and Tajikistan on the common standards of the WTO (General Agreement on Trade in Services) and the EAEU (some provisions were borrowed from EAEU law) even without their membership in the WTO (Uzbekistan) or the EAEU (Uzbekistan and Tajikistan). The Treaty on the Eurasian Economic Union has preserved international agreements on trade in services in the sphere of national competence of the member states therefore, the EAEU is not a party to the agreement.

In August and September 2023, the Central Bank of Russia started raising the key lending rate, ending up at 13% in September, while USD to RUB exchange rate remained at RUB 95. As of June 2023 share of Russia's exports to EU dropped to 1.7% while Russia's imports from EU dropped to 1.5%. In October 2023 the "psychological barrier" of RUB 100 per USD 1 was crossed. In July 2024 the Russian Central Bank raised the key interest rate to 18%.

The 2024 budget expects revenues of 35 trillion rubles ($349 billion) with expenditure of 36.6 trillion, based on a Urals oil forecast of $71.30 per barrel, a 90.1 rubles to USD 1 exchange rate and inflation of 4.5%. Defence spending will double to 10.78 trillion, 29.4% of expenditure. Russia currently has a record low unemployment rate of just 3 percent, due to a demographic decline, demands of the war for industrial and military manpower, and large scale emigration.

In January 2025, it was reported that Russia had used a two-prong strategy to finance the large costs of the Russo-Ukrainian war since early 2022. In addition to the official Russian government defense budget
—direct financial expenditure for waging the war was estimated at US$250 billion through June 2024, rising to over 20% of annual GDP—an off-budget financing mechanism was employed to fund the war with over US$200 billion from preferential bank loans made to defence contractors and war-related businesses, loans compelled by the Russian government.

Russian economy had a significant expansion in 2023, because it is crowded out by defense spending. This became an inflationary output gap, which lead to a stagnation, and became a recession in 2025. Until 2026 Russian economy is expected to have a stagnation, because of the shrinking of the output gap, with the risk of a stagflation still remaining.

File:Map of countries by GDP (PPP) per capita in 2022 by IMF.png, Gross domestic product (PPP) per capita in April 2022
File:Russiaunemployment.png, Unemployment rate of Russia since the fall of the Soviet Union
File:Russian inflation rate.webp, Russian inflation rate 2012–2022

Data

Original data are obtained and published in the national currency of the Russian Federation, the Russian ruble, by the Federal State Statistics Service Rosstat, as well as other organizations of which Russia is a member, such as the Eurasian Economic Commission and the Statistical Committee of the Commonwealth of Independent States. Due to the conversion of values into other currencies, the volume in other nominal currencies may fluctuate sharply. The average annual exchange rate of the ruble is usually used to convert annual data. The World Bank uses the Atlas method (a three-year average) to estimate GNI. Purchasing power parities is calculated as part of the successive cycles of the World Bank's International Comparison Program and comes into effect after several years (ICP 2021 data were published in May 2024 and applies by the World Bank since July 2024 and by the IMF since October 2024).

The following table shows the main economic indicators in 1990https://www.imf.org/external/datamapper/PPPPC@WEO/RUS–2023 and future estimates (indicated *) by the IMF.

Income inequality

In Russia, areas where income is higher have increased air pollution. However while income may have been higher in these regions a greater disparity in income inequality was found. It was discovered that "greater income inequality within a region is associated with more pollution, implying that it is not only the level of income that matters but also its distribution". In Russia areas lacking in hospital beds suffer from greater air pollution than areas with higher numbers of beds per capita which implies that the poor or inadequate distribution of public services also may add to the environmental inequality of that region.

Currency and monetary policy

On 25 December 1993, the Constitution of the Russian Federation came into force, where the main provisions were prescribed in the Article 75. The currency in the Russian Federation is the ruble. Monetary emission is carried out exclusively by the Central Bank of the Russian Federation (the Bank of Russia). The introduction and emission of other money in the Russian Federation is not allowed. The protection and ensuring the stability of the ruble is the main function of the Central Bank of the Russian Federation, which it carries out independently of other government bodies. On 1 September 2013, the Bank of Russia also became a regulator of financial markets, applying the integrated model of financial sector supervision.

The Central Bank of the Russian Federation follows inflation targeting policy. Higher inflation than in developed countries has remained throughout the last 25–30 post-Soviet years and the devaluation of the currency (in relation to foreign currencies and in relation to domestic goods) is significantly compensated by higher interest rates and an increase in nominal incomes and assets. This situation is typical for developing markets. Typically devaluations of the ruble relative to foreign currency strongly stimulate the export-oriented economy of Russia.

Foreign exchange

The currency exchange rate of the Russian ruble is floating.

In 2011, the Bank of Russia, which was then headed by Sergei Ignatiev, took a course towards abolishing the currency corridor and designated a transition to a floating exchange rate for the ruble. Already under the new head of the Central Bank of the Russian Federation, Elvira Nabiullina, it was planned to complete the transition to a floating exchange rate regime from 1 January 2015. The Bank of Russia dismantled the currency corridor two months earlier - on 10 November 2014, so as not to waste gold and foreign exchange reserves. A 2025 study said that an important constraint on the economy was “Russia’s dependence on hard currencies like the dollar and the euro, with only partial “yuanization” of its foreign trade transactions”.

Ruble's Real Effective Exchange Rate remained in 2022–24 higher and stronger than in 1994 and 1998 when the sharp devaluations happened relative to the foreign currency.

Public policy

Federal, regional and municipal budgets

Fiscal policy

Russia was expected to have a Government Budget deficit of $21 billion in 2016. The budget deficit narrowed to 0.6% of GDP in 2017 from 2.8% in 2016.

Debts

Russia is a creditor nation and has a positive net international investment position (NIMP). Russia has one of the lowest government debts (total external and domestic) and lowest external debts (total public and private) among major economies.

In 2022, domestic government debt increased by 13.9 percent to 18.78 billion rubles. Russia Domestic government Debt data was reported at RUB 19,801.921 billion in May 2023.

In 2022, the share of external debt to GDP was 17%, decreasing from 26.3% in 2021. Russia's external debt was estimated at 381.8 billion U.S. dollars as of 1 January 2023, down 20.8 percent from the previous year. Russia External Debt reached USD 357.9 billion in March 2023, compared with USD 380.5 billion in the previous quarter.

National wealth fund

On 1 January 2004, the Government of Russia established the Stabilization fund of the Russian Federation as part of the federal budget to balance it if price of oil falls. On 1 February 2008, the Stabilization fund was divided into two parts. The first is a reserve fund equal to 10% of GDP and was to be invested in a similar way as the Stabilization Fund. The second is the National Welfare Fund of the Russian Federation to be invested in more risky instruments, including some shares in domestic and foreign companies. The Reserve fund which started with $125 billion was exhausted by 2017 and discontinued. The National Wealth Fund had started with $32 billion in 2008 and by August 2022, peaked at $201 billion. December 2023 saw it fall to $133 billion with liquid assets also down at $56 billion.

Corruption

Russia was the lowest rated European country in Transparency International's Corruption Perceptions Index for 2020; ranking 129th out of 180 countries. Corruption is perceived as a significant problem in Russia, affecting various aspects of life, including the economy, business, public administration, law enforcement, healthcare, and education. The phenomenon of corruption is strongly established in the historical model of public governance in Russia and attributed to general weakness of rule of law in Russia. As of 2020, the percentage of business owners who distrust law enforcement agencies rose to 70% (from 45% in 2017); 75% don't believe in impartiality of courts and 79% do not believe that legal institutions protect them from abuse of law such as racketeering or arrest on dubious grounds.

Regional economies and economic regions

Federal subjects

According to the Moscow Government, the Moscow economy is the largest among the Russian Federation constituent entities: the capital accounts for one fifth of the country's total gross regional product. Moscow is one of the largest urban economies in the world in terms of GDP (purchasing power parity, PPP) and one of the top 5 global megalopolises according to this value. The Moscow GDP (PPP) in 2021 amounted to USD 25.500 billion, which is more than that of Seoul, Shanghai or Paris. The Government refers to Oxford Economics stating that Moscow ranked third among the world's cities in terms of GDP at purchasing power parity.

According to statements by the Mayor of Moscow in 2024, Moscow contributes more than 20 per cent of the country's GDP. This contribution is related to innovation, IT sector and services. Labour productivity in Moscow is on average 2.5 times higher than in Russia due to the high concentration of residents.

Moscow is home to 90 billionaires in 2025 – 16 more than a year ago. Moscow comes in second place behind New York City according to Forbes. Moscow is home to 30,000 high-net-worth individuals (HNWI), whose wealth is estimated at $1 million, according to Henley & Partners.

Groupings

Russia is divided into twelve economic regions.

In 2018, the Russian Ministry of Economic Development developed a strategy for the spatial development of Russia, in which it was proposed to introduce the division into 14 macro-regions. In February 2019, the strategy was approved and the division into 12 macro-regions was implemented.

There are also macrozones such as the Baikal Amur Mainline economic zone.

Centre-periphery model

According to a 2011 research article, the nature of the relationship between the centre and the regions in Russia today corresponds to the so-called " centre-periphery" model; excessive centralisation, the absence of alternative (to Moscow) centres in the country's territorial structure and weak horizontal links are stable characteristics of the Russian political and economic space and are constantly reproduced over time.

More than a decade ago, Professor Natalia Zubarevich proposed an extension of the centre-periphery model and is known as the author of the "theory of four Russias". According to Zubarevich, the different speed of social modernisation is more accurately explained by the centre-periphery model. The entire population of the country can be divided into three roughly equal parts - about a third of citizens in each. The underdeveloped republics, where 6% of the country's population lives - this "fourth" Russia has its own specific features. According to the concept, "First Russia" is the cities with millions of inhabitants, i.e. the most modernised and economically developed territories. "Second Russia" are medium-sized cities with a pronounced industrial profile. "Third Russia" - small towns, workers' settlements, rural areas. Compared to "first" and "second Russia" - this is a deep periphery in terms of the quality of socio-economic life. The "fourth Russia" is made up of the national republics of the Caucasus, as well as the south of Siberia (Tuva, the Altai Republic). These territories also represent a periphery, but a specific one: the demographic transition has not been completed here, urbanisation is in its infancy, and patriarchal-clan principles are still strong in society.

Monoprofile towns ( monotowns) are the most unstable part of the "second Russia".

Sectors

Primary

Energy

The mineral-packed Ural Mountains and the vast fossil fuel (oil, gas, coal), and timber reserves of Siberia and the Russian Far East make Russia rich in natural resources, which dominate Russian exports. Oil and gas exports, specifically, continue to be the main source of hard currency.

Russia has been widely described as an energy superpower; as it has the world's largest natural gas reserves, the second-largest coal reserves, the eighth-largest oil reserves, and the largest oil shale reserves in Europe. It is the world's leading natural gas exporter, the second-largest natural gas producer, the second-largest oil exporter and producer, and the third largest coal exporter. Fossil fuels cause most of the greenhouse gas emissions by Russia. The country is the world's fourth-largest electricity producer, and the ninth-largest renewable energy producer in 2019. Russia was also the world's first country to develop civilian nuclear power, and built the world's first nuclear power plant. In 2019, It was the world's fourth-largest nuclear energy producer. After the collapse of the Soviet Union, the Russian state nuclear conglomerate Rosatom became the dominant actor in international nuclear power markets, training experts, constructing nuclear power plants, supplying fuel and taking care of spent fuel in around the world. Whereas oil and gas were subject to international sanctions after Russia's full-scale invasion of Ukraine in February 2023, its nuclear industry was not targeted by sanctions.

In the mid-2000s, the share of the oil and gas sector in GDP was around 20%, and in 2013 it was 20–21% of GDP. The share of oil and gas in Russia's exports (about 50%) and federal budget revenues (about 50%) is large, and the dynamics of Russia's GDP are highly dependent on oil and gas prices, but the share in GDP is much less than 50%. According to the first such comprehensive assessment published by the Russian statistics agency Rosstat in 2021, the maximum total share of the oil and gas sector in Russia's GDP, including extraction, refining, transport, sale of oil and gas, all goods and services used, and all supporting activities, amounts to 16.9% in 2017, 21.1% in 2018, 19.2% in 2019 and 15.2% in 2020. To compare the data obtained using the same methodology, the source provides data for other countries. This is more than the share of GDP in the United States (8%) and Canada (less 10%). This is comparable to the share of GDP in Norway (14%) and Kazakhstan (13.3%). It is much lower than the share of GDP in the United Arab Emirates (30%) and Saudi Arabia (50%). This assessment did not include, for example, the production of used pumps or specialized education, which should have been included, according to experts. Russia consumes domestically two-thirds of its gas production and a quarter of its oil production while it sells three-quarters of its oil on the world market and Russia's share of the traded world oil market is 17.5% - more than Saudi Arabia's. At the same time, experts note that there are formal and informal part of the rent and the total oil and gas rent in 2023 can be estimated at 24% of Russia's GDP. Michael Alexeyev (son of Lyudmila Alexeyeva), a professor of economics at Indiana University, notes that the oil and gas taxes reported by the government do not include corporate dividends and the so-called indirect or additional revenues derived from the expenditure of oil and gas rents in the economy. There is also such an indicator as the oil rent (% of GDP), which is published by the World Bank. It is 9.7% for Russia, 14.8% for Kazakhstan, 6.1% for Norway, 23.7% for Saudi Arabia, 15.7% for the United Arab Emirates, 2.8% for Canada and 0.6% for the United States.

2023 saw a fall in Russia's oil and gas tax revenues of 24% to 8.8 trillion roubles ($99.4 billion) compared to 2022.

Mining

Russia is also a leading producer and exporter of minerals and gold. Russia is the largest diamond-producing nation in the world, estimated to produce over 33 million carats in 2013, or 25% of global output valued at over $3.4 billion, with state-owned ALROSA accounting for approximately 95% of all Russian production."Ranking Of The World's Diamond Mines By Estimated 2013 Production"
, '' Kitco'', 20 August 2013.

In 2019, the country was the 3rd world producer of gold; 2nd worldwide producer of platinum; 4th worldwide producer of silver; 9th largest world producer of copper; 3rd largest world producer of nickel; 6th largest world producer of lead; 9th largest world producer of bauxite; 10th largest world producer of zinc; 2nd worldwide producer of vanadium; 2nd largest world producer of cobalt; 5th largest world producer of iron ore; 7th largest world producer of boron; 9th largest world producer of molybdenum; 13th largest world producer of tin; 3rd largest world producer of sulfur; 4th largest world producer of phosphate; 8th largest world producer of gypsum; in addition to being the world's 10th largest producer of salt. It was the world's 6th largest producer of uranium in 2018.

Agriculture

Russia's agriculture sector contributes about 5% of the country's total GDP, although the sector employs about one-eighth of the total labour force. It has the world's third-largest cultivated area, at . However, due to the harshness of its environment, about 13.1% of its land is agricultural, and only 7.4% of its land is arable. The main product of Russian farming has always been grain, which occupies considerably more than half of the cropland. Russia is the world's largest exporter of wheat, and is the largest producer of barley, buckwheat, oats, and rye, and the second-largest producer of sunflower seed. Various analysts of climate change adaptation

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