General economic background
Russia is a transcontinental country extending over much of northern Eurasia (Europe and Asia). According to the Constitution, the politics of Russia (the Russian Federation) take place in a framework of a federal presidential republic, whereby the President of Russia is the head of state and the Prime Minister of Russia is the head of government. Executive power is exercised by the government. Legislative power is vested in both the government and the two chambers of the Federal Assembly of the Russian Federation.
Economy of Russian Federation
During the first half of 2007, the Russian economy maintained a high development pace from the first quarter of 2007. According to the Ministry of Economic Development of Russia, in the period of January - June of 2007 GDP grew by 7.8%, increasing in comparison to the analogical period in the previous year (6% in January - June of 2006). For the whole half-year period, a high pace of development was ensured by the growth of investment demand, construction, manufacturing industry as well as a high level of consumption demand. A key role was also played by the slowdown of exports and an intensification of competition in imports.
Growth of investments in basic capital in January - June of 2007 amounted to 22,3% accordingly to the analogous period of 2006. Growth of investment demand from the beginning of the year was permanently accompanied by the high development level in the construction sector.
The first half of 2007 was also characterized by the increasing level of domestic consumption demand supported by a stable increase in the population's real income (11,2%) and an even higher level of real salary growth (17,5%).
In the first half of 2007, CPI amounted to 5,7% in comparison to 6,2% in the first half of 2006. Although inflation was lower than in previous years , it's decrease was not stable. In the April - June period, inflation was higher than in previous years because of a lack of supply of some products accompanied by the growth in the population's total income.
Foreign investment
Official and unofficial barriers impede foreign investment in Russia. Officially, Russia restricts investments in aerospace, natural gas, insurance, electric power, defense, natural resources, Russian liquor concerns, and large-scale construction projects. In 2005, the government announced a decision barring foreign-controlled companies from bidding for its most lucrative natural resources. Additionally, corruption is a serious unofficial barrier to foreign investment. Residents and non-residents may hold foreign exchange accounts, subject to restrictions and government approval in some cases. Payments and transfers are subject to restrictions and surrender requirements. Transactions involving capital and money market instruments, derivatives, and credit operations are subject to central bank authorization in many cases.
Foreign trade
Export growth in the January - June period of 2007, according to the Ministry of Economic Development of Russia, amounted to 11,6% and was much lower than in the analogous period in 2006 (31,1%). Slowdown of export growth in the first half of 2007 was connected to a decrease in world oil prices as well as a decrease of exports in the industrial production sector. In contrast, imports increased by 38,5% in comparison to the analogous period of 2006. The main factors for this are the rise of domestic demand as well as investment activity. Moreover, imports were stimulated by an increase in the real rubble exchange rate.
Industry
The main industries in Russia include a complete range of mining and manufacturing industries that produce coal, oil, gas, chemicals and metals; all forms of machine building from rolling mills to high-performance aircraft and space vehicles; 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 and handicrafts.
Infrastructure
In Russia there are 87,157 km of railway tracks, of which 40,300 are electrified. There are also 537,289 km of roadways, of which 362,133 km were paved in 2001. In September 2007 28,7% of the adult population had access to the internet.
Russia has a wide natural resource base, including major deposits of oil, natural gas, coal and many strategic minerals, and timber, but also formidable obstacles of climate, terrain and distance hinder exploitation of these natural resources.
GENERAL DATA
Area: 17,075,200 sq km
Population: 142.2 million
Capital city: Moscow
Language: Russian
Ethnic groups: Russian 81.5%, Tatar 3.8%, Ukrainian 3%, Chuvash 1.2%, Bashkir 0.9%, Belarusian 0.8%, Moldavian 0.7%, other 8.1% (1989)
Land boundaries: Azerbaijan, Belarus, China, China, Estonia, Finland, Georgia, Kazakhstan, North Korea, Latvia, Lithuania, Mongolia, Norway, Poland, Ukraine
MACRO DATA
GDP (real growth): 6,7%
GDP (nominal in current prices): €747.2 billion
GDP per capita:
Inflation: 7.5% 7.5% (December 2006 - September 2007)
Unemployment: 6.7%
Export: €238.58 billion
Import: €108.62 billion
*2006 est. source: Rosstat
USEFUL DATA
Currency: Russian ruble (RUR)
Exchange rate
(2006 avg.): €/RUB 35.7897 RUB/€ 0.0279
Time zone: GMT +2 do +12
Area code: +7
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