The Russian Gdp

In: Business and Management

Submitted By cbenjaminsmith
Words 619
Pages 3
Russian GDP

Following the section about Russian output, we now turn to the BRICS country GDP, Inflation, and Monetary Policy. All three of these areas of the Russian economy depend immensely on the product that is 70% of Russian export: Oil. We see that each year there is a dip in the price of oil Russian (for example 1998 and 2008) we see a dip in GDP and a rise in inflation. Hence, the monetary policy set by the Central Bank of Russia is contingent upon the gas price. The Russian GDP has been growing staidly since 2008. We see that before the 2008 global financial crisis, Nominal GDP was on an annual rise of 7%. However, in 2008 the Oil price plummeted from 147.00USD/barrel to 50.00USD/barrel. This caused a government shortfall in the 08-09 fiscal years, and resulted in a sharp dip in nominal GDP from which Russia has yet to recover. However, despite the 2008 crisis, the Russian GDP has been growing 4.3% annually since 2008, as the price of oil continues to rise. In 2011, as Russian citizens are getting back to work, the current GDP per capita is $13,236 USD. The primary problem with the Russian economy is its historically high inflation. Only recently has the Russian economy seen an inflation number in the single digits (3.7% as of Feb. 2012). Nevertheless, in 2011, the inflation rate was a little bit under 10% and is has been in the general 10-15% range since 2004, with the 15% spike in 2008. The reason for the low inflation rate this year is based in three main areas: the contractive monetary policy, increasing interest rates, and an unpredicted strong crop harvest. The historic inflation issue has plagued Russia since long after the collapse of the Soviet Union. In 1999, Russia hit an inflation rate of a little over 90%. That being said, the main goal of the Central Bank of Russia’s monetary policy is to control and decrease the inflation rate.…...

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