Russia flag Russia: Economic and Political Overview

The economic context of Russia

Economic Indicators

On February 24th 2022, Russia initiated a military conflict on the Ukrainian territory, which profoundly upsets the current political context in both countries and will have substantial political and economic ramifications. For the ongoing updates on the developments of Russia-Ukraine conflict please consult the dedicated pages on BBC News.

The latest specific information on economic sanctions against Russia in response to the conflict in Ukraine is available below:
•    What sanctions are being imposed on Russia
•    The list of global sanctions on Russia for the war in Ukraine

After a strong recovery from the COVID-19-induced recession, the Russian economy contracted again in 2022 (-2.1%), in the context of the war in Ukraine and the subsequent economic sanctions imposed by Western countries (IMF). In 2023, however, the country’s GDP growth was stronger than expected, reaching an estimated 2.2% amid substantial budget support. Due to the Central Bank of Russia tightening monetary policy, which is likely to dampen domestic demand, the IMF outlook indicates a slower growth rate this year (1.1%), with a further decrease to 1% in 2025 (1.3% and 0.9%, respectively, according to the World Bank). In general, Russia's reliance on imports is not that significant, but certain sectors face high exposure, notably transportation equipment manufacturing, chemicals, food products, and IT services. Sanctions limiting access to Western inputs have adversely affected these sectors, prompting efforts to seek substitutes from other countries such as China, Belarus, and Turkey, as well as allowing parallel imports.

Concerning public finances, Russia's federal budget deficit amounted to 1.9% of the country's GDP in 2023, or RUB 3.24 trillion (about USD 36.1 billion), according to preliminary data by the Russian Finance Ministry. The volume of federal budget expenditure totalled RUB 32.36 trillion, a 4% year-on-year increase. On the other hand, revenues amounted to RUB 32.36 trillion (+4.7% year-on-year), with non-oil and gas revenues reaching RUB 20.30 trillion, a 25% increase, whereas oil and gas budget revenues fell by 23.9% to RUB 8.82 trillion. The 2024 budget sees a remarkable surge in spending, reaching RUB 36.6 trillion in 2024 with an expected deficit of RUB 1.595 trillion. As of December 31, 2023, the external debt of the Russian Federation amounted to USD 326.6 billion, marking a decrease of USD 57.0 billion or 14.9% from the end of 2022, as estimated by the Bank of Russia. This decline was primarily driven by reductions in liabilities from various sectors, including loans raised within direct investment arrangements. The rapid decrease in the indebtedness of the general government was influenced by a reduction in the volume of Russian sovereign debt securities. The debt-to-GDP ratio was estimated at 21.2% in 2023 by the IMF and is expected to remain relatively stable over the forecast horizon. In an effort to prevent inflation from getting out of control, the Russian central bank raised interest rates to about 16%; the inflation rate, however, remained relatively high in 2023 (at 5.3%) given the government stimulus packages. The decrease in oil and gas prices throughout 2023 significantly reduced demand for the Russian ruble. Consequently, the currency experienced a depreciation of 30% against the USD since the end of November 2022, coinciding with the implementation of the West's oil embargo and price caps.

Social inequalities remain high, especially between large cities and rural areas: only 1% of the population owns around 70% of private assets. Despite the emergence of an urban middle class, the poverty rate remains at around 14.3% (Rosstat, January-March 2023). According to IMF estimates, the unemployment rate decreased to 3.3% in 2023, from 3.9% one year earlier. It is forecast to drop slightly to 3.1% this year before picking up to 3.5% in 2025 amid lower real economic growth.

Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 2,272.261,997.032,056.842,090.522,117.24
GDP (Constant Prices, Annual % Change) -
GDP per Capita (USD) 15,48813,64814,39114,65914,884
General Government Balance (in % of GDP) -1.3-2.5-2.3-1.5-0.6
General Government Gross Debt (in % of GDP) 18.519.720.821.922.8
Inflation Rate (%)
Unemployment Rate (% of the Labour Force)
Current Account (billions USD) 238.0450.5755.8357.1559.34
Current Account (in % of GDP)

Source: IMF – World Economic Outlook Database, October 2021

Main Sectors of Industry

Despite its large area, Russia has relatively little arable land due to unfavourable climatic conditions. The country nevertheless owns 10% of the world's agricultural land and is one of the main exporters of cereals. The northern regions of the country focus mainly on livestock, while the southern regions and western Siberia produce cereals. Agriculture contributes 3.9% of the national GDP and employs around 6% of the total working population. According to Rosstat, in 2023, grain harvest amounted to 142.6 million tons, including 92.8 million tons of wheat. In the same year, Russia sold USD 43 billion worth of agricultural products, which was 14% higher than the previous season. The main growth drivers were grains and legumes, vegetable oils, milk powder, oilseeds, and meat.

Industry accounts for 32.8% of Russia's GDP and employs 27% of the workforce. The Russian industrial sector is characterized by its diverse range of industries and resources. Key sectors include energy, with Russia being one of the world's leading producers of oil, natural gas, and coal. Additionally, the country has a robust manufacturing sector, particularly in heavy industries such as metallurgy, machinery, and aerospace. The automotive industry also holds a significant position within Russian industrial production. Emerging sectors include technology and innovation, with a focus on sectors such as information technology, biotechnology, and nanotechnology. Russia's industrial sector is undergoing modernization efforts aimed at enhancing efficiency, productivity, and competitiveness in the global market. Russia’s industrial production growth stood at 3.5% y-o-y in 2023, with industries such as furniture, computers, electronic and optical products, motor vehicles, and pharmacology recording the best performances (Rosstat).

The service sector employs 67% of the population and generates 54% of the GDP. Dominant sectors include finance and banking, with Moscow serving as a prominent financial centre in the region. Retail and wholesale trade play significant roles. The tourism industry is also important although it was hindered by the COVID-19 pandemic and the conflict with Ukraine. Emerging sectors include information technology (IT) and digital services, as Russia seeks to capitalize on its skilled workforce and technological capabilities. Additionally, there is increasing attention on healthcare and education services as the government aims to improve access and quality in these areas.

Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 5.8 26.9 67.3
Value Added (in % of GDP) 3.9 32.8 54.0
Value Added (Annual % Change) 6.7 -0.2 -2.3

Source: World Bank, Latest Available Data. Because of rounding, the sum of the percentages may be smaller/greater than 100%.


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Indicator of Economic Freedom


The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.}}

World Rank:
Regional Rank:

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation


Business environment ranking


The business rankings model measures the quality or attractiveness of the business environment in the 82 countries covered by The Economist Intelligence Unit’s Country Forecast reports. It examines ten separate criteria or categories, covering the political environment, the macroeconomic environment, market opportunities, policy towards free enterprise and competition, policy towards foreign investment, foreign trade and exchange controls, taxes, financing, the labour market and infrastructure.

World Rank:

Source: The Economist Intelligence Unit - Business Environment Rankings 2021-2025


Country Risk

See the country risk analysis provided by Coface.

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Sources of General Economic Information

Ministry of Economic Development
Ministry of Industry and Trade
Statistical Office
Federal State Statistics Service
Central Bank
Russian Central Bank
Stock Exchange
Moscow Exchange
Economic Portals

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Latest Update: April 2024

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