russian economy
Russian economy Since the fall of communism in the former Soviet Union in 1991, Russia is still struggling to establish a modern market economy, modernize its industrial base, and maintain strong economic growth. Russian GDP has contracted an estimated 45% since 1991, despite the country's wealth of natural resources, its well-educated population, and its diverse - although increasingly rundown - industrial base. Russia achieved a slight recovery in 1997, but the government's budget deficits and the country's poor business climate made it vulnerable when the global financial crisis swept through in 1998. The crisis culminated in the depreciation of the ruble; a debt default by the government, and a sharp deterioration in living standards for most of the population. Overall, the period 1992-1998 was marked by a poor business climate and failure to institute modern market reforms. The economy rebounded and conditions improved markedly in 1999-2002, with annual output growing by an average 6%, encouraged by the competitive boost from the weak ruble and a surging trade surplus fuelled by rising world oil prices. This recovery, along with a renewed government e
Russia's sovereign credit ratings have been boosted, although it has yet to reach investment grade. 5% a year, a trend that is expected to accelerate. The Russian stock market in 2001 achieved the second highest growth rate in the world, second only to Argentina, which experienced even faster rates of growth in the wake of its own stock market crash and financial crisis. During 2001 rates of inflation in consumer prices declined, but consumer prices grew by 18. The rate of inflation in industry was lower than the rate of inflation in consumer prices in 2001. High international energy and metals prices and robust industrial production, as well as competitiveness provided by the low value of the ruble, contributed to growth in the initial years, with a high international oil price in particular reinforcing growth more recently. 7 percent, respectively, over the previous year. The resulting contraction in labor force may limit future growth prospects. InflationAnnual inflation for 2002 was 15. Recent economic trends in Russia The Russian economy performed in line with expectations in 2002. International trade & foreign investment Russia's large domestic market, vast supply of natural resources, and skilled and welleducated labour force are features that have already attracted considerable foreign interest, despite the challenges posed to potential investors. 0 percent in 2001, with industry, agriculture and construction as the main contributors to the growth.
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