“Their GDP is less than $800 billion.”
Our State Dept says their GDP in 2006 was $986 billion and goes on to say:
“The Russian economy underwent tremendous stress in the 1990s as it moved from a centrally planned economy to a free market system. Difficulties in implementing fiscal reforms aimed at raising government revenues and a dependence on short-term borrowing to finance budget deficits led to a serious financial crisis in 1998. Lower prices for Russia’s major export earners (oil and minerals) and a loss of investor confidence due to the Asian financial crisis exacerbated financial problems. The result was a rapid and steep decline (60%) in the value of the ruble, flight of foreign investment, delayed payments on sovereign and private debts, a breakdown of commercial transactions through the banking system, and the threat of runaway inflation.
Still, Russia weathered the crisis well. In the 8 years following the financial crisis, GDP growth averaged just under 7% due to a devalued ruble, implementation of key economic reforms (tax, banking, labor and land codes), tight fiscal policy, and favorable commodities prices. Household consumption and fixed capital investments have both grown by about 10 percent per year since 1999 and have replaced net exports as the main drivers of demand growth. Inflation and exchange rates have stabilized due to a prudent fiscal policy (Russia has run a budget surplus since 2003). The government created a stabilization/rainy day fund ($127 billion in mid-2007), and has the third-largest foreign exchange reserves in the world (close to $420 billion in mid-2007) which should shelter it from commodity price shocks.
Russia’s balance of payments moves from strength to strength. The current account balance grew from $58.6 billion in 2004 to $95.3 billion in 2006, almost entirely due to oil price increases. The capital account turned positive in 2006, with net inflow of $6.1 billion. In addition, net private capital flows in 2006 increased significantly to $40.9 billion, compared to an inflow of $0.1 billion in 2005 due to liberalization of the capital account in mid-2006. Foreign direct investment (FDI) flows dramatically improved in 2006 to an estimated $31 billion (inflows totaled $15.4 billion and $14.6 billion in 2004 and 2005, respectively). As of July 1, 2006, the ruble is convertible for both current and capital transactions. Russia prepaid its entire Soviet-era Paris Club debt of $22 billion in late 2006, pushing Russia’s sovereign foreign debt down to $45 billion at the end of 2006, or about 5 percent of GDP. Russia’s total public and private foreign debt at the end of 2006 was $310 billion, or 31 percent of GDP. Such a dramatic reversal to the macroeconomic situation is truly remarkable. Russia currently has a sovereign investment-grade rating from Standard and Poor’s of BBB+.”
IMF says that their GDP this year is growing at more than 7%. How are we doing?
IMF says that their GDP this year is growing at more than 7%.
If we grow at 2% this year, we'll add over $260 billion to GDP. That's about a third of their entire GDP. If they grow at 7%, that's about $50 billion.
How are we doing?
We're doing okay. Some of us need some help with their math. LOL!