The general socio-economic situation in Russia: the main features and characteristics of the modern market

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:55

The Russian economy is a multi-component complex of economic and other activities, consisting of a relatively developed agro-industrial sector and services. Despite the development of private entrepreneurship and the privatization of a number of economic facilities, the state and state-owned companies control about 70 percent of the country's GDP. At the same time, the current socio-economic situation in Russia can be considered unsatisfactory.

Russia's place in the global economy

In the global economy, Russia ranks sixth in terms of GDP. In 2017, the country's combined gross domestic product was about $4 trillion. In terms of nominal GDP, our country is in 11th place in the world, and its volume is $1,527 billion. At the same time, in terms of GDP per person, the Russian Federation is only in 48th place.

The total contribution of Russia and the world economy is also small and amounts to 3.2%, and in the sector of global assets - 1 percent.

Changes in the country's economy inhistorical past

In the 19th century, the socio-economic situation in Russia was at a very low level. During the Soviet period, the country's economy was stable and had a planned character. The decisive role was played by the economic sectors: mining, manufacturing, and agriculture. GDP per capita was small, but social inequality was almost non-existent. But in the late 1980s, something went wrong, as a result of which the old system collapsed and was replaced by a poorly organized market system. A sharp decline in production began, rising prices, falling investments, an increase in foreign loans, a decrease in incomes of residents and other negative phenomena.

At the same time, the economy shifted from planned to market. Despite tough tax laws, there was systematic tax evasion. Also characteristic of the 90s was the increase in the gap in the standard of living of different Russian regions.

Zero Years Economy

The zero years were the most successful in terms of the restoration of the Russian economy. Annual GDP growth during this period ranged from 5.1-5.2% in 2001 and 2008 to 1% in 2000 and 8.5% in 2007. Growth was noted in the industrial and agricultural sectors, as well as construction. The income of the population grew. The reduction in poverty was 16% (from 29 in 2000 to 13 in 2007).

Taxation has become more liberal, and tax collection has increased. The income tax was set on a flat scale. In general, the number of taxes decreased by 3 times (from 54 to 15). ATin particular, income tax was reduced.

In 2001, the ownership of land was introduced. Other reforms were also carried out: banking, pension, preferential, labor and other types. Since 2006, the ruble has become a freely convertible currency.

Economy of the country after 2010

Until 2014, the state of the economy remained favorable. After overcoming the local crisis of 2008-2009, there was a rapid recovery and further growth of the country's GDP. In 2012, Russia joined the World Trade Organization, which could have affected the future fate of the country. From the same year, the progressive trend in the economy began to break. If in 2010 and 2011 the annual GDP growth was about 4%, then in 2012 it was 3.3%, and in 2013 it was only 1.3%. The growth of industrial production was even more strongly reduced. The export of capital from the country has increased.

A sharper deterioration in the economy began in 2014, which is largely due to the fall in oil prices, and at the end of this year with the introduction of economic sanctions. The income of the population began to decline, and a sharp increase in the outflow of capital was noted. The economic crisis officially started in December 2014.

Social and economic situation of modern Russia

The sharpest decline in the socio-economic well-being of the country occurred in 2015-2016. Oil prices collapsed by almost 4 times, reaching the bottom in early 2016, after which they began to gradually recover. This led to a sharp depreciation of the ruble against the dollar and the euro. Revenuefrom exports fell sharply.

During this period, the incomes of the population declined markedly, while prices, on the contrary, rose. The rise in prices hit the most important commodities, food and medicine, especially hard. The cost of transport services has increased. Unemployment rose sharply (primarily due to the informal unemployed). The peak of the decline in household incomes occurred in 2016, and GDP - in 2015. This is evidenced by Rosstat data on the socio-economic situation in Russia.

A significant number of workers began to receive wages below the living wage established at that time.

In 2017, the situation began to gradually improve. The growth of the country's GDP and a sharp decline in inflation were noted. Wages in some sectors increased, but overall income levels continued to decline. The debt burden on the population and the number of bad debtors increased.

In 2018, despite the sharp (up to $75 per barrel) rise in oil prices, the socio-economic situation in the country remained tense.

Features of the economy at the end of 2017 - the first quarter of 2018

In 2017, there were significant shifts in the global economy that have an impact on our country. The OPEC + Russia deal, which has already become historic in its scale, stimulated the growth of hydrocarbon prices. After the collapse of oil prices in early 2016 to $25-30 per barrel, they began to gradually recover, but until mid-2017were held in the region of 50 dollars per barrel. From the second half of this year, within a few months, they rose to 70 - 75 dollars per barrel, after which they fixed at this level. At the same time, there was a rise in prices for other Russian export goods: metals, coal, timber.

These values are much higher than the baseline budgeted ($40 per barrel). Thus, this should be an incentive for the recovery of the country's economy. However, the opinions of experts are not yet so optimistic. Many note the urgent need for transformation that could form the basis for future growth. So far, the incomes of the population continue to gradually decline, and the economy is growing too slowly or even stagnating. At the end of 2017, a decline in industrial production was noted, and household incomes declined this year, contrary to the forecasts of the Ministry of Economic Development, which gave them a slight increase.

There is currently no consensus on the future development of the situation. There are both optimists and pessimists among the experts. Optimists, like officials, are counting on the resumption of economic growth in 2018.

Forecasts for 2018

Information about the socio-economic situation in Russia is provided by official structures. According to economists' forecasts, in 2018 inflation will be 4%, and GDP growth - 1.44%. At the same time, the income of the population is expected to grow up to 2 percent. The total volume of investments will grow by 2.2 - 3.9%. However, according to Oreshkin, due to the lack of required reformseconomic growth will be lower than necessary for the progressive development of the country.

Among the negative factors, experts point to the following:

• High dependence of the domestic economy on hydrocarbon prices. In this regard, they do not observe any positive developments.
• Insufficient level of government.
• Unfavorable demographic situation and growing number of pensioners.
• The sanctions policy of the West, which limits the possibilities for the development of the country.

Among other factors, analysts note a resumption of growth in capital outflows.

The situation in the regions

In Russia, there is a pronounced difference between the level of economic development in different administrative entities. The socio-economic situation of Russian regions is often not the same and may vary according to different indicators. In the first place according to these parameters is the city of Moscow. This is followed by the Republic of Tatarstan, then the Khanty-Mansiysk Autonomous Okrug. The fifth place is the Moscow region, the sixth is the Tyumen region. The seventh line is occupied by the Krasnodar Territory, and the eighth - by the Yamalo-Nenets Autonomous Okrug. On the ninth and tenth places - Yakutia and the Krasnoyarsk Territory, respectively.

The last places are: Kurgan region, Karachay-Cherkessia, Pskov region, Kalmykia, Ingushetia, Ivanovo region, Kostroma region and some other regions of the country.

Conclusion

Thus, the socio-economic analysis of the situation in Russia showsthe vulnerability of the Russian economy to external challenges. He also talks about the need to change the economic course. Our country has every chance to achieve high results, since Russia ranks first in the world in terms of the diversity and quantity of natural resources. A competent and thoughtful economic policy could make it one of the leaders in terms of economic and social development.