Economy - overview:
Russia ended 2006 with its eighth straight year of growth, averaging 6.7% annually since the financial crisis of 1998. Although high oil prices and a relatively cheap ruble are important drivers of this economic rebound, since 2000 investment and consumer-driven demand have played a noticeably increasing role. Real fixed capital investments have averaged gains greater than 10% over the last five years, and real personal incomes have realized average increases over 12%. During this time, poverty has declined steadily and the middle class has continued to expand. Russia has also improved its international financial position since the 1998 financial crisis. Over the past several years, Russia has used its stabilization fund based on oil taxes to prepay all Soviet-era sovereign debt to Paris Club creditors and the IMF. Foreign debt has decreased to 39% of GDP, mainly due to decreasing state debt, while commercial debt to foreigners has risen strongly. Oil export earnings have allowed Russia to increase its foreign reserves from $12 billion in 1999 to some $315 billion at yearend 2006, the third largest reserves in the world. These achievements, along with a renewed government effort to advance structural reforms and fiscal restraint, have raised business and investor confidence in Russia's economic prospects. Russia's economy grew 6.6% in 2006 and inflation growth was below 10% for the first time in the past 10 years. Russia shows signs of increasing its ties to the global economy, having signed a bilateral market access agreement with the US as a prelude to possible WTO entry. Nevertheless, serious problems persist. Oil, natural gas, metals, and timber account for more than 80% of exports, leaving the country vulnerable to swings in world commodity prices. Russia's manufacturing base is dilapidated and must be replaced or modernized if the country is to achieve broad-based economic growth. The banking system, while growing at a high rate and increasing consumer lending, is still small relative to the banking sectors of Russia's emerging market peers. Domestic and foreign investor sentiment is tempered by political uncertainties ahead of elections, corruption, and widespread lack of trust in institutions. President PUTIN continues to grant more influence to forces within his government that desire to reassert state control over the economy. Government spending has increased and risks becoming populist, most notably in the form of the four "national projects" of agriculture, education, housing, and medicine. Russia has made little progress in building the rule of law, the bedrock of a modern market economy.

GDP (purchasing power parity):
$1.723 trillion (2006 est.)

GDP (official exchange rate):
$733 billion (2006 est.)

GDP - real growth rate:
6.6% (2006 est.)

GDP - per capita (PPP):
$12,100 (2006 est.)

GDP - composition by sector:
agriculture: 5.3%
industry: 36.6%
services: 58.2% (2006 est.)

Labor force:
73.88 million (2006 est.)

Labor force - by occupation:
agriculture: 10.8%
industry: 29.1%
services: 60.1% (2005 est.)

Unemployment rate:
6.6% plus considerable underemployment (2006 est.)

Population below poverty line:
17.8% (2004 est.)

Household income or consumption by percentage share:
lowest 10%: 1.7%
highest 10%: 38.7% (1998)

Distribution of family income - Gini index:
40.5 (2005)

Inflation rate (consumer prices):
9.8% (2006 est.)

Investment (gross fixed):
18.2% of GDP (2006 est.)

Budget:
revenues: $222.2 billion
expenditures: $157.3 billion; including capital expenditures of $NA (2006 est.)

Public debt:
8% of GDP (2006 est.)

Agriculture - products:
grain, sugar beets, sunflower seed, vegetables, fruits; beef, milk

Industries:
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, and 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

Industrial production growth rate:
4.8% (2006 est.)

Electricity - production:
952.4 billion kWh (2005)

Electricity - consumption:
940 billion kWh (2005)

Electricity - exports:
22.3 billion kWh (2005)

Electricity - imports:
9.9 billion kWh (2005)

Oil - production:
9.4 million bbl/day (2005 est.)

Oil - consumption:
2.5 million bbl/day (2005 est.)

Oil - exports:
7 million bbl/day (2005)

Oil - imports:
100,000 bbl/day (2005)

Oil - proved reserves:
74.4 billion bbl (2005 est.)

Natural gas - production:
641 billion cu m (2005 est.)

Natural gas - consumption:
445.1 billion cu m (2005 est.)

Natural gas - exports:
216.8 billion cu m (2004 est.)

Natural gas - imports:
36.6 billion cu m (2004 est.)

Natural gas - proved reserves:
47.57 trillion cu m (1 January 2005 est.)

Current account balance:
$105.3 billion (2006 est.)

Exports:
$317.6 billion (2006 est.)

Exports - commodities:
petroleum and petroleum products, natural gas, wood and wood products, metals, chemicals, and a wide variety of civilian and military manufactures

Exports - partners:
Netherlands 10.3%, Germany 8.3%, Italy 7.9%, China 5.5%, Ukraine 5.2%, Turkey 4.5%, Switzerland 4.4% (2005)

Imports:
$171.5 billion (2006 est.)

Imports - commodities:
machinery and equipment, consumer goods, medicines, meat, sugar, semifinished metal products

Imports - partners:
Germany 13.6%, Ukraine 8%, China 7.4%, Japan 6%, Belarus 4.7%, US 4.7%, Italy 4.6%, South Korea 4.1% (2005)

Reserves of foreign exchange and gold:
$314.5 billion (2006 est.)

Debt - external:
$287.4 billion (30 June 2006 est.)

Economic aid - recipient:
in FY01 from US, $979 million (including $750 million in non-proliferation subsidies); in 2001 from EU, $200 million (2000 est.)

Currency (code):
Russian ruble (RUR)

Exchange rates:
Russian rubles per US dollar - 27.5 (2006), 28.284 (2005), 28.814 (2004), 30.692 (2003), 31.349 (2002)