Economic Performance of Russia: Analysis of GDP, Unemployment, and Inflation

Running head: ECONOMICS
Economics
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ECONOMICS1
Introduction
Russian economy is considered as an upper middle income country. Currently the
economy is in its transition phase following the state ownership in most of strategic areas of
the nation. The economy is blessed with abundant natural resources. The economy holds 30
percent of total natural resources of the world. Total natural resources of Russia valued $75
trillion in US dollar. Revenue generated from the energy sector is the major driver of
economic growth of Russia. The oil and gas sector of Russia accounts nearly 12 percent of
total GDP and 52 percent of total revenue of federal budget (Blasi, Kroumova & Kruse.
2018) Almost 70 percent exports of Russia are related to oil and gas sector.
Since Soviet Union collapsed, the economy of Russia faced considerable change in its
economy. The economy since then initiated the transition from a centrally planned economy
to a market oriented economy. Both reforms and economic growth have stagnated in recent
years. Today Russia is a state dominated economy having concentration of wealth in the
hands of officials. Russia in one of the leading producers of natural gas and oil in the world.
It is also one of the leading exporters of aluminum and steel. The economy is heavily reliant
on change in global commodity export making it vulnerable to boom and depression cycle
and also the volatility of global commodity prices. From 1998 to 2008 due to rapid increase
in prices of oil the economy maintained an average growth rate of 7 percent (Rosser &
Rosser, 2018). After that economic growth started to decline because of exhaustion of
commodity based model of growth of the nation. In 2015, the economy experienced a severe
recession with growth falling to 2.8 percent.

ECONOMICS2
Analysis of production output performance
Real GDP
Gross Domestic Product of a nation is measure of aggregate output of a nation. It
accounts for monetary values of all the produced goods and services within a nation. GDP
can be measured either using prices of the accounting year or using market prices of a fixed
base year. If current year price is used in measuring GDP, then it is called nominal GDP. If
GDP is computed using monetary value of the fixed base year then it is called real GDP. Real
GDP thus is an inflation adjusted measure for accounting movement of aggregate output.
Growth in Real GDP
Growth rate in real GDP measures the changes in real GDP over time. It is a measure
of economic growth of a nation and computed as a percentage change in real GDP from one
year to another (Goodwin et al., 2015).
Per capita Real GDP
Per capita Real GDP is a measure of average output per person of a nation. It gives an
estimation regarding obtained GDP per person. The concerned indicator is compute by
dividing the real GDP by population of the nation.

ECONOMICS3
Trend on Real GDP measures
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
1.30
1.35
1.40
1.45
1.50
1.55
1.60
1.65
1.70
1.75
1.58
1.46
1.52
1.59
1.65 1.68 1.69
1.65 1.66 1.68
1.72
Real GDP
Year
Real GDP (in trillion)
Figure 1: Trend in real GDP in Russia from 2008 to 2018
(Data source: worldbank.org, 2019)
The above figure summarizes trend in real GDP in Russia. There is an overall
increasing trend in real GDP of Russia. Real GDP in 2008 is 1.58 trillion. In the next year,
real GDP declined to 1.46 trillion. The decline in real GDP mainly due to global financial
crisis and decline in oil and gas prices during this time (Dreger et al., 2016). Since then real
GDP continued to increases with recorded GDP being 1.72 trillion in 2018.