1. Smith v/s Keynes
RUSSIAN ECONOMY
Presented by:
Raja Vignesh D
Sairam T A
Srinivasan R

2. Russia at a glance
 Largest country in the world
 Ninth most populous country
 Russian economy - Tenth largest by Nominal GDP
 One of the largest producers of oil and natural
gas globally
 GDP (nominal) : $1.236 trillion
 HDI (2014): 50th
 Currency – Russian ruble (RUB)

3. Economic history
 Fall of the Soviet economy
 Transition to market economy after the dissolution
of the USSR (1991-1995)
 Russian financial crisis (1998)
 Recovery and growth (1999-2014)

4. Fall of the Soviet economy
 Industrial output of the Soviet Union was going to
the military
 Budget allocated for military was at the expense
of investment in rest of the economy
 Miners were not working as they had no
incentives to work
 Agricultural sector was also hit by the crisis

5. Transition to Market
Economy
 Moved from a centrally planned economy to a
globally integrated market economy
 Real GDP fell by more than 40%, and
Hyperinflation wiped out savings
 Revenue collection became difficult for the
Government amid the collapsing economy
 Russia depended on short term borrowings to
finance budget deficits.
 Became the largest borrower from the IMF with
loans totalling $20 billion.

6. Recovery and growth
 Ruble was devalued which made domestic
producers more competitive nationally and
internationally
 After Putin took over, Russian GDP doubled from
0.7 trillion USD to 1.2 trillion USD
 After 16 years of negotiations, Russia’s
membership to WTO was accepted in 2011

7. Current performance and
issues

8. Corruption in Russian
Govt.

9. The tumbling Ruble

10. Soaring Inflation

11. GDP growth on the
decline

12. Plummeting Gasoline
prices

13. Fiscal Policy measures
Short Term:
 Maintain steady FDI flow
 Create an anti-crisis spending budget
 Raise the rate of Savings and Investment for
increasing capital formation
 Pact with Middle East countries

14. Fiscal Policy measures
Long Term:
 Increase defence supplies
 Reduce degree of inequality of income and
wealth
 Infrastructural Development
 Adopt anti-inflationary taxation policy

15. Monetary Policy measures
 Bank Rate
 Cash Reserve Ratio
 $371.6 Billion Forex
 Private Sector Loan
 Govt. bonds and securities
 Over the counter trade

16. Consolidated Plan
 Stabilize the Reserve fund
 Diversify source of funds
 Explore new markets for steady oil supply
 The Central Bank of Russia should have a certain
level of independency from the government to
achieve low inflation
 Balance of Payment equilibrium

17. THANK YOU