Founded in the 12th century, the Principality of Muscovy was able to emerge from over 200 years of Mongol domination (13th-15th centuries) and to gradually conquer and absorb surrounding principalities. In the early 17th century, a new ROMANOV Dynasty continued this policy of expansion across Siberia to the Pacific. Under PETER I (ruled 1682-1725), hegemony was extended to the Baltic Sea and the country was renamed the Russian Empire. During the 19th century, more territorial acquisitions were made in Europe and Asia. Defeat in the Russo-Japanese War of 1904-05 contributed to the Revolution of 1905, which resulted in the formation of a parliament and other reforms. Repeated devastating defeats of the Russian army in World War I led to widespread rioting in the major cities of the Russian Empire and to the overthrow in 1917 of the imperial household. The communists under Vladimir LENIN seized power soon after and formed the USSR. The brutal rule of Iosif STALIN (1928-53) strengthened communist rule and Russian dominance of the Soviet Union at a cost of tens of millions of lives. After defeating Germany in World War II as part of an alliance with the US (1939-1945), the USSR expanded its territory and influence in Eastern Europe and emerged as a global power. The USSR was the principal adversary of the US during the Cold War (1947-1991). The Soviet economy and society stagnated in the decades following Stalin’s rule, until General Secretary Mikhail GORBACHEV (1985-91) introduced glasnost (openness) and perestroika (restructuring) in an attempt to modernize communism, but his initiatives inadvertently released forces that by December 1991 splintered the USSR into Russia and 14 other independent republics.
North Asia bordering the Arctic Ocean, extending from Europe (the portion west of the Urals) to the North Pacific Ocean
wide natural resource base including major deposits of oil, natural gas, coal, and many strategic minerals, reserves of rare earth elements, timber
Population - distribution
population is heavily concentrated in the westernmost fifth of the country extending from the Baltic Sea, south to the Caspian Sea, and eastward parallel to the Kazakh border; elsewhere, sizeable pockets are isolated and generally found in the south
Russian (official) 85.7%, Tatar 3.2%, Chechen 1%, other 10.1%
MOSCOW (capital) 12.166 million; Saint Petersburg 4.993 million; Novosibirsk 1.497 million; Yekaterinburg 1.379 million; Nizhniy Novgorod 1.212 million; Samara 1.164 million (2015)
- Conventional long form
- Russian Federation
- Conventional short form
- Local long form
- Rossiyskaya Federatsiya
- Local short form
- Geographic coordinates
- 55 45 N, 37 36 E
- Time difference
- UTC+3 (8 hours ahead of Washington, DC, during Standard Time)
has not submitted an ICJ jurisdiction declaration; non-party state to the ICCt
Russia has undergone significant changes since the collapse of the Soviet Union, moving from a centrally planned economy towards a more market-based system. Both economic growth and reform have stalled in recent years, however, and Russia remains a predominantly statist economy with a high concentration of wealth in officials' hands. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy, transportation, banking, and defense-related sectors. The protection of property rights is still weak, and the state continues to interfere in the free operation of the private sector.
- External debt stocks
- US$ 467,719,708,000
- Total tax rate (% of commercial profits)
- Real Interest Rate
- Manufacturing, value added (% of GDP)
- Current Account Balance
- US$ 25,006,120,000
- Labor Force, Total
- Employment in Agriculture
- Employment in Industry
- Employment in Services
- Unemployment Rate
- Imports of goods and services
- US$ 263,746,981,376
- Exports of goods and services
- US$ 329,937,992,065
- Total Merchandise Trade
- FDI, net inflows
- US$ 32,976,220,000
- Commercial Service Exports
- US$ 49,679,230,000
grain, sugar beets, sunflower seeds, vegetables, fruits; beef, milk
complete range of mining and extractive industries producing coal, oil, gas, chemicals, and metals; all forms of machine building from rolling mills to high-performance aircraft and space vehicles; defense industries (including radar, missile production, advanced electronic components), shipbuilding; road and rail transportation equipment; communications equipment; agricultural machinery, tractors, and construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables, textiles, foodstuffs, handicrafts
- petroleum and petroleum products, natural gas, metals, wood and wood products, chemicals, and a wide variety of civilian and military manufactures
- Netherlands 11.9%, China 8.3%, Germany 7.4%, Italy 6.5%, Turkey 5.6%, Belarus 4.4%, Japan 4.2% (2015)
- machinery, vehicles, pharmaceutical products, plastic, semi-finished metal products, meat, fruits and nuts, optical and medical instruments, iron, steel
- China 19.2%, Germany 11.2%, US 6.4%, Belarus 4.8%, Italy 4.6% (2015)
- Country Risk Rating
- Political and economic uncertainties and an occasionally difficult business environment can affect corporate payment behavior. Corporate default probability is appreciable.
- Business Climate Rating
- The business environment is difficult. Corporate financial information is often unavailable and when available often unreliable. Debt collection is unpredictable. The institutional framework has many troublesome weaknesses. Intercompany transactions run major risks in the difficult environments rated C.
- Abundant natural resources (oil, gas and metals)
- Skilled labor force
- Low public debt and comfortable foreign exchange reserves
- Assertion of regional and energy power
- Increased ‘rentier’ nature of the economy
- Weak private banking sector
- Weak infrastructures
- Declining demography
- Persistent deficiencies in the business climate
Positive but weak Russian growth is expected in 2017. Activity in the hydrocarbon sector is unlikely to pick up much: production reached a record level in 2016 (11.2 million bpd), though the lack of investment and the maturity of several oilfields limit prospects for increased production capacity. Meanwhile, at the end of November 2016 Russia made a commitment to the OPEC countries to gradually reduce its output by 300,000 bpd over 6 months. The manufacturing sector (agrifood, chemicals/pharmaceuticals) could benefit from a slight upturn in domestic demand. Construction activity could be stimulated by various projects, in particular, in anticipation of the 2018 football world cup. Private investment is expected to remain hampered by the persistent lack of business confidence, high interest rates. Private consumption, the main driver of activity, will be buoyed by the slow increase in household income, associated, in particular, with a less restrictive fiscal policy, which, in particular, authorises an increase in retirement pensions. Real income could also benefit from the moderation in inflation.
Continuing the trend observed in late 2016, price growth could slow in 2017 because of the strengthening of the ruble's exchange rate, which limits imported inflation. Monetary policy (interest rate at 10% since September 2-16) is expected to be eased very gradually so as not to threaten the central bank's inflation target (4% in 2018).
In the absence of real progress in the conflict in East Ukraine, the sanctions imposed by the EU could be maintained beyond the end of January 2017, the date on which the member countries will be re-examining the matter. If the sanctions applied by the US are lifted or eased, after Donald Trump becomes president, improved access to international finance could help the country post stronger growth in 2017.
Fiscal income is projected to rise in 2017 thanks to changes in taxation of the hydrocarbon sector (50% of total) and the profits of public-sector companies. The moderate rise in oil prices will thus boost State revenues. Further privatisations (VTB Bank and the shipping firm, Sovcomflot, in particular), after those of Alrosa, Bashneft and Rosneft in 2016, will also contribute to the improvement of the public finances. The 2017 draft budget includes an increase in social spending, offset by cuts to other items. The aim is to gradually bring down the deficit, while sustaining demand in the run up to the presidential elections in 2018 without fuelling inflation.
The State, whose debt remains low, has comfortable foreign exchange reserves (around 11 months of imports in late October 2016), plus sovereign fund assets totalling over USD 100 billion (more than 8% of GDP) at end October 2016.
The current account surplus is expected to increase due to a rise in hydrocarbon exports (about 2/3 of total exports), which however is likely to be modest if the commitment to reduce production is respected. Manufactured products, in contrast, are expected to remain uncompetitive on external markets. The upturn in domestic demand, even though it is moderate, could however be reflected in higher imports, limiting the improvement in the current account balance.
The dollar's appreciation could put pressure on the ruble's exchange rate, which should, nonetheless, be strengthened by favourable developments in oil prices and capital flows: FDIs are not expected to rebound in the absence of real improvement in the Ukraine situation and in governance; however, capital outflows will slow, because of the reduction in external debt repayments (about USD 80 billion in 2017 compared with 90 billion in 2016) and incentives for repatriating funds held abroad.
The banking sector's position continues to worsen. Solvency and liquidity risks are increasing because of the deteriorating quality of the portfolio (the non-performing loan ratio was close to 10% of the total in late 2016). The number of banking institutions is expected to continue to fall (down from over 780 in 2014 to 600 in late 2016).
The crisis in Ukraine played a unifying role among the Russian population and has reinforced Vladimir Putin's popularity. The September 2016 parliamentary elections confirmed the dominance of President Putin's United Russia Party (54% of the votes cast), but on a low turnout (48% compared with 60% in 2011). Dissatisfaction exists, but State control of the media and the internet considerably limits the ability of opposition movements to organise and express themselves.
Governance shortcomings and the lack of corporate transparency strongly weaken the business climate. Russia has been downgraded on most of the World Bank's indicators, especially regarding regulatory quality and has made no progress on the fight against corruption.