Russia
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Capital
Moscow
Largest city
Moscow
Administrative divisions
8 federal districts
Currency
Russian ruble (RUB)
Area
17,075,400 km2
Population
143,300,000 (2012)
Calling code
+7
Official language
Russian
Latest Business Opportunities
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Ease of trading across borders
Importing a standard container of goods into Russia requires:
Introduction
With over 140 million consumers, a growing middle class, and almost unlimited infrastructure needs, Russia remains one of the most promising markets for UK exporters. Russia is a geographically vast market, spanning nine time zones and encompassing over 17 million square miles. Russia's GDP growth rate for the last five years has substantially exceeded that of most industrially developed countries. Growth is driven by high commodity prices and booming domestic consumer demand.
Economic snapshot (% annual growth rate)
| 2011 | 2012 | 2013-16 | |
|---|---|---|---|
| GDP | 4.3 | 3.4 | 3.9 |
| Export of goods and services | 0.3 | 1.0 | 5.1 |
| Import of goods and services | 20.3 | 9.5 | 7.8 |
| inflation | 8.4 | 5.1 | 5.7 |
| Short-term interest rates (%) | 7.7 | 7.3 | 7.6 |
| Exchange rate (per £) | 51.6 | 48.7 | 52.05 |
| Population | -0.1 | -0.1 | -0.1 |
| Unit labour cost | 5.0 | 5.8 | 19 |
| Source: Oxford Economics |
Economic outlook
The economy grew by 3.4% last year, however revisions to the profile of GDP indicated that activity was stronger in the second half of 2012 than previously thought, implying an improved base effect for growth this year. Growth over the short term is likely to be driven by domestic demand with households’ purchasing power supported by the continued strength of labour market conditions as the unemployment rate has recently fallen below its pre-crisis trough. The economy is expected to grow by 3.2% this year, followed by 3.9% in 2014.
Trade outlook
The economy remains dominated by the oil and gas sector, which accounts for around 15% of GDP and some 65% of export earnings. Russia is primarily a commodities exporter and this position will be maintained. Russia’s primary import sectors are cars, car components, pharmaceuticals, computers and consumer electronics. Russia’s main trade partners include China, the Netherlands, Germany, Italy and Japan with expected trade with all of them set to increase in volume terms over the next 15 years.
SWOT analysis
| Strengths Emerging middle class Energy independence Large domestic market |
Weaknesses Uneven economic development Political risk |
| Opportunities 2014 Sochi Winter Olympic Games & FIFA World Cup 2018 Oil & gas Advanced engineering and manufacturing technologies |
Threats Ageing infrastructure Falling oil prices Demographic decline |
Russia's trade with the UK
Sector segmentation growth
Sectors to watch:
- Pharmaceuticals
- Medical & surgical equipment
- Other precision equipment
Manufacturing
- Rubber & plastics
- Motor vehicle bodies & parts
Fastest-growing exporters into Russia
| Rank | 2012 |
|---|---|
| 1 | Malaysia |
| 2 | Vietnam |
| 3 | Argentina |
| 4 | UAE |
| 5 | Mexico |
| 6 | Canada |
| 7 | Turkey |
| 8 | Indonesia |
| 9 | Saudi |
| 10 | Bangladesh |
Total merchandise trade - Leading import partners
Opportunities for UK businesses
The Russian Government is putting a lot of effort into attracting more investment into the country. The Government’s economy modernisation and infrastructure development agenda together with an increasing consumer appetite for quality services and goods make Russia a very attractive target for British exports. Western goods and expertise remain in demand. The most promising opportunities for UK companies are in the advanced engineering, financial services, IT, energy, sports & leisure, infrastructure (particularly the Sochi 2014 Winter Olympics) and construction.
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