Russia Economy

Russia Economy


  • Basic data
  • Public finances and the state budget
  • Banking system
  • Tax system

Basic data

Economic entities in Russia, especially large state-owned enterprises, prefer stability over dynamism, and the development of GDP corresponds to this. It is growing more slowly than Russia would need (ideally 3-3.5% pa), rather its growth is in the range of 1.5-2%. Russia’s indebtedness has been low for a long time, the country does not like to borrow on the financial markets, which in turn is related to a preference for lower debt over the threat of default in the event of a worsening of the situation and a rise in interest rates. State capital plays the main role in the economy, private domestic and foreign resources are incomparably smaller. Inflation must be reduced in 2022 with the help of administrative steps by the government and interventions by the central bank, mainly due to the increase in food prices in the first half of 2021. Unemployment is low, around five percent, because the Russian social network cares little for the unemployed.

According to, the economic structure of the Russian economy is still a legacy of the Soviet Union, with large industrial enterprises producing mainly heavy engineering goods, metals and alloys, chemical production, and oil and gas extraction. Since the 1990s, Russia has been trying to reduce its dependence on revenues from the sale of oil and gas abroad. Even though the dependence of the state budget has fallen from two-thirds to roughly one-third (in a good year), it is still the basic source of state income. Given the fluctuations in the prices of both raw materials, it is difficult to plan the revenues of the state budget.

Pointer 2018 2019 2020 2021 2022
GDP growth (%) 2.5 1.3 -3.1 2.5 2.1
GDP/population (USD/PPP) 28,346.9 28,744.7 28,400.0 29,560.0 30,770.0
Inflation (%) 2.9 4.5 3.4 3.9 4.2
Unemployment (%) 4.8 4.6 5.8 5.8 4.8
Export of goods (billion USD) 443.9 419.9 329.5 405.3 432.5
Import of goods (billion USD) 248.9 254.6 240.1 264.1 280.0
Trade Balance (Billion USD) 195.1 165.3 89.4 141.2 151.4
Industrial production (% change) 3.6 3.4 -2.9 3.8 2.4
Population (millions) 148.8 148.9 149.0 148.9 148.8
Competitiveness 43/140 43/141 ON ON ON
OECD export risk 4/7 4/7 4/7 4/7 ON

Source: EIU, OECD, WEF

Russia’s balance of payments is permanently positive, the amount of the positive balance depends mainly on the price of oil and the exchange rate of the ruble. In 2019, the balance of payments was +$6billion, while in 2020 it fell to $3billion. The main reason was the drop in oil prices in the first half of 2020. Its reduction was also the main reason for the decrease in the positive trade balance of the Russian Federation from 16to 89.4 billion USD (2019 vs. 2020). The balance of services, on the other hand, is permanently negative, in 2019 it was -3and in 2020 it was -18.3 billion dollars. All values ​​for 2020 are still subject to change in the final recalculation during 2021.

The external public debt of the Russian Federation was 46 billion USD in May 2021. The total indebtedness of Russian entities to official multilateral creditors was 411 billion dollars at the same time.

Public finance and state budget

Public finance
State budget balance (% of GDP) -1.9
Public debt (% of GDP) 19.9
Current account balance (billion USD) 50.1

The coronavirus pandemic has fundamentally affected the government’s ideas and estimates of revenues and expenditures of the state treasury for the next three years. On September 30, 2020, the government submitted to the State Duma of the Russian Federation a draft law on the federal budget for 2021 and for the planning periods of 2022 and 2023. When creating the document, the government was based on two priorities: to fulfill the state’s social obligations to citizens and to speed up the implementation of national development plans that are only slowly starting goals and plans. These national projects became the most important plan of the Russian president to support the national economy. In principle, these are investment projects for which individual ministers are responsible, and the president controls their implementation.

According to the budget plan, revenues in 2021 will amount to 18.77 trillion rubles, in 2022 – 20.64 trillion rubles, in 2023 – 22.26 trillion rubles. Spending in 2021 is planned at 21.52 trillion rubles, in 2022 – 21.88 trillion rubles, in 2023 – 23.67 trillion rubles. At the same time, 2.25 trillion rubles are provided for the implementation of national projects in 2021, 2.62 trillion rubles in 2022 and 2.79 trillion rubles in 2023.

Even before the pandemic, the state was counting on annual budget surpluses. But the new reality leads to the fact that the budget deficit in 2021 will be 2.75 trillion rubles, in 2022 – 1.25 trillion rubles and in 2023 – 1.41 trillion rubles. The main source of its financing will be government loans. The draft budget is prepared on the basis of the basic version of the forecast of the socio-economic development of the country. The proposal anticipates a slow recovery of the global economy due to the continued restrictions associated with the spread of COVID-19. According to the presented forecast, the Russian economy will grow by 3.3% in 2021, by 3.4% in 2022, and by 3% in 2023. During this entire period, inflation will not exceed 4%. The estimated volume of GDP in 2021 will be 115.53 trillion rubles, in 2022 – 124.22 trillion rubles, in 2023 – 132.82 trillion rubles.

Banking system

In the Russian Federation there is a so-called two-tier banking system. The first level represents the Central Bank as the issuing center and the main regulator of the banking sector. The second level is represented by credit organizations, i.e. commercial banks and non-bank credit organizations. According to the form of ownership, state and private banks, banking institutions with foreign capital or 100% owned by foreign investors operate in the RF.

Over the past thirty years, Russia and its banking system have gone through several crises that originated both domestically (pyramid schemes, hyperinflation) and foreign (e.g. the 2008-9 crisis). Therefore, great pressure is exerted on the Central Bank to ensure, above all, the stability of the system. The Central Bank is therefore very strict in carrying out controls and it is practically the norm that at least one hundred banks are under its forced administration.

Russian banking is highly concentrated, the strongest banks are part of industrial-financial groups, most often with a majority state share. In the 100 largest banking institutions, the state’s share of total assets is 76%. This is also why only two private banks made it into the ten largest banks in 2020: Tinkoff and Raiffeisenbank Russia. The largest bank has long been Sberbank (undergoing re-branding to Sber), followed by VTB, Gazprombank, Alfa bank, Bank Otkrytije, Rosselchozbank, Tinkoff, Moskovskij kreditnyj bank, Promsvjazbank, Raiffeisnebank.

Banking in Russia is highly technologically advanced. Recently, banks have started to buy companies from other areas (ticket sales, taxi services, health services, etc.). With the involvement of start-ups, mostly from the field of fin-tech, they create ecosystems around themselves, in which dozens of companies operate side by side in one environment (mobile application or website). The goal is to create such an environment and services that clients can solve all their financial and life needs through one financial group. The biggest ambitions in this area are shown by Sber and Alfa bank.

Tax system

The current tax system of Russia consists of taxes and fees of federal, regional, local, so-called annulled and special tax regimes. Its legislative form is published in the Tax Code of the Russian Federation. These are two federal laws – the Tax Code, part one of 31/07/1998, No. 146-FZ (amended on 1/5/2019) and the Tax Code (Code), part two of 5/8/2000, no. 117-FZ – as amended, including the latest amendments to the Act of 30 November 2016 (FZ No. 401).

Federal taxes and fees
• Value added tax (20% and on some goods 10%)
• Excise taxes – alcohol, tobacco products, gasoline, etc. (different rates depending on, among other things, technical specifications)
• Personal income tax ( basic rate 13%, certain incomes according to their origin 9, 15, 30, 35%)
• Tax on profits of organizations (basic rate 20%)
• Tax on the extraction of mineral resources
• Water tax
• Payments for the right to use natural resources and for the use of aquatic biological resources.

Regional taxes and fees
• Organizational property
tax • Traffic tax
• Gambling tax.

Local taxes and fees
• Land tax
• Property tax of natural persons
• Business tax.

Special tax regimes
• Unified agricultural tax
• Simplified tax system (accounting and reporting for small business entities, tax regimes of free trade zones and closed administrative units, regimes of concession contracts and production sharing contracts, etc.)
• Patent taxes.

Note: More details can be obtained from the websites: and In 2020, a number of temporary tax reliefs and measures were adopted to ease the fight against the consequences of the coronavirus. These are temporary reliefs, it is always necessary to make sure of the possibility of using them for the business of a particular company.

Russia Economy