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 initially drove this growth, since 2003 consumer demand and, more recently, investment have played a significant role. Over the last five years, fixed capital investments have averaged real gains greater than 10% per year and personal incomes have achieved real gains more than 12% per year. 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. The federal budget has run surpluses since 2001 and ended 2006 with a surplus of 9% of GDP. 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, although 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. During PUTIN's first administration, a number of important reforms were implemented in the areas of tax, banking, labor, and land codes. These achievements have raised business and investor confidence in Russia's economic prospects, with foreign direct investment rising from $14.6 billion in 2005 to an estimated $30 billion in 2006. In 2006, Russia's GDP grew 6.6%, while inflation was below 10% for the first time in the past 10 years. Growth was driven by non-tradable services and goods for the domestic market, as opposed to oil or mineral extraction and exports. Russia has signed a bilateral market access agreement with the US as a prelude to possible WTO entry, and its companies are involved in global merger and acquisition activity in the oil and gas, metals, and telecom sectors. Despite Russia's recent success, serious problems persist. Oil, natural gas, metals, and timber account for more than 80% of exports and 32% of government revenues, 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. A 20% appreciation of the ruble over 2005-06 has made attracting additional investment more difficult. The banking system, while increasing consumer lending and growing at a high rate, is still small relative to the banking sectors of Russia's emerging market peers. Political uncertainties ahead of the elections, corruption, and widespread lack of trust in institutions continue to dampen domestic and foreign investor sentiment. From 2002 to 2005, the government bureaucracy increased by 17% - 10.9% in 2005 alone. President PUTIN has granted more influence to forces within his government that desire to reassert state control over the economy. Russia has made little progress in building the rule of law, the bedrock of a modern market economy. The government has promised additional legislation to make its intellectual property protection WTO-consistent, but enforcement remains problematic.
More finance information from Russia:
General Economic Links:
| Chase.com |
| With many branches across the U.S., Chase provides many personal and business banking services
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| DealBook |
| The New York Times online daily digest of finance news and analysis is constantly updated during the market day.
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| Financial Times |
| This venerable international business newspaper reports extensively on business and stock markets.
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| Financial-portal.com |
Portal presents comprehensive financial resources, articles, news, stats, indexes, financial institutions etc:
- articles on financial topics
- financial news
- latest currency charts
- latest gold, silver, platinum and other precious metal prices
- current financial indexes and dynamic graphs
- universal currency converters (all major currencies)
- stock, commodity and other major exchanges
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| Finweb.com - the independent financial portal |
| "Financial security. Everyone wants it; few have it. Many do not realize that true financial security requires strength in every area of one’s financial affairs. It requires a systematic approach, a strategic plan implemented over time, in order to obtain it. But it can be obtained. With the proper educational training and discipline, financial stability and security is within anyone’s grasp. That’s why we’re here: to provide you with a solid foundation of valuable financial knowledge from which to proceed..."
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| Fitch Ratings |
| Provides independent global credit rating information for the world’s credit markets
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| Forbes.com |
| Extensive coverage of business and financial news, Forbes is one of the premier sites covering the world of business.
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| Google Finance |
| Google Finance provides an unclutered interface to finance news, market summary with graphs, stock quotes, top movers and other indicators. Also search companies by stock code.
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| Kiplinger |
| Personal finance site that offers calculators, business news, quotes and much more personal finance information
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| MarketWatch |
| This Dow Jones operated site provides personal finance news, advice and stock market data and analysis
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| MSN Money |
| The MSN (Microsoft Network) provides a finance portal including latest finance news, market updates and resources.
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| Yahoo Finance |
| The Yahoo search engine provides a finance portal with breaking news, market summaries and editor articles.
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