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The Economy

The decline ... economic activity in Russia during the 1990s was one of the most dramatic economic collapses ever experienced by any large country.

Economic conditions became uncertain ... everyone, and some sections of the population, particularly large families ... low incomes, experinced a significant deterioration in their standard of living.

By 1998 Russia’s economic system had been radically altered, but many problems remained. Foreign direct investment was limited, the banks and stock markets were underdeveloped. Inflation had been reduced but the federal budget was consistently ... deficit.

In any event, Russian society somehow coped ... drastic economic change until the financial crisis of August 1998.

The financial crisis forced an unforeseen devaluation ... the rouble, which declined dramatically in value ... the US dollar.

Many feared that the huge devaluation would trigger inflation. In fact however, the devaluation served to benefit the manufacturing sector.

The revival of production was significant. In 1999 the economy received further encouragement from an increase ... world petroleum prices, leading ... official GDP growth of 8.3% in 2000.

In 2001 gross domestic product, at current prices, amounted ... 9,040,800 m. roubles. Services rather than goods constituted more than one half of that figure. The economy has been growing since that time though further reforms remain necessary in many areas, including banking, accounting, small business and the legal system.