Economics Department

Economic Survey of Russia 2009


Contents | Executive summary | How to obtain this publication | Additional information



The next Economic Survey of Russia will be prepared for 2011.


An Economic Survey is published every 1½-2 years for each OECD country and for selected non-OECD countries.

Read more about how Surveys are prepared.

The OECD assessment and recommendations on the main economic challenges faced by Russia are available by clicking on each chapter heading below.

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Chapter 1. Stabilisation and renewed growth: Key challenges

Russia enjoyed a decade of strong growth until mid-2008, but has since been gripped by a severe recession. The near term challenge is to limit the severity and duration of the downturn. Looking beyond the crisis, the overarching challenge is to put in place a sounder growth model driven by innovation, investment, and the accumulation of human capital. This will require reforms in many areas, but this chapter focuses on a few key challenges: 1) strengthening the macroeconomic policy framework; 2) improving the functioning of the financial system; and 3) raising the levels of competition throughout the economy via streamlined state involvement and lower barriers to entry.


Chapter 2. Ensuring growth-friendly fiscal policy in both the short and the long term

Until late 2008 the main fiscal policy challenge for Russia was to decide what proportion of abundant oil revenues to save and which assets to accumulate. The onset of the crisis transformed that situation, giving rise to large deficits and bringing questions of fiscal sustainability back into play. The main short term fiscal policy challenge is to gauge the optimal amount and form of fiscal stimulus as well as the right scale and modalities of public support for the banking system, while safeguarding fiscal sustainability. Over the longer term, fiscal policy can contribute to raising potential growth rates. Taxation of natural resource wealth will remain a critical issue in this respect, and scope exists for the government to appropriate economic rents more efficiently and consistently across sectors while protecting incentives for exploration and development. Reforms in this and other areas can make the overall tax system more growth-friendly without worsening equity.


Chapter 3. Making exchange rate policy more flexible and monetary policy more effective

This chapter discusses the challenges for monetary and exchange rate policy given large terms terms-of-trade shocks and volatile capital flows. It first examines the effectiveness of the quasi-fixed exchange rate regime in fostering disinflation during the long upswing in oil prices, arguing that, while the upturn in inflation from mid-2007 can be attributed partly to a surge in international commodity prices, underlying inflation remained high due to an excessively accommodative monetary policy. The chapter then reviews monetary and exchange rate policy after the onset of the global financial crisis. It acknowledges that the pre-announced stepwise adjustment of the exchange rate was costly, but suggests that this was a second-best policy given debt dollarisation. The first-best policy would have been to allow more exchange rate flexibility in the pre-crisis years, thereby weakening the incentives for corporate borrowing in foreign currency. The chapter suggests that not all conditions for adopting inflation targeting in Russia are yet in place, but that preparations should be accelerated.


Chapter 4. Making the banking sector more efficient and resilient

Russia’s banking system grew much larger and stronger between the 1998 financial crisis and the onset of the current global crisis, but continued to play a limited role in intermediating savings and investment, especially for small and medium-sized enterprises. Moreover, some weaknesses in prudential supervision remained, and there were still too many very small banks doing little if any banking business. This chapter discusses the policy imperatives in the short term, in the face of the crisis, and reforms that could be implemented over the longer term to improve the efficiency and resilience of the financial system and raise Russia’s potential growth rate. While the current crisis is painful for both the banking sector and the broader economy, it may facilitate a restructuring of the system that will be positive in the long run, as well as new approaches to regulation that will make banking less crisis-prone.


Chapter 5. Improving regulation in Russia’s goods and services markets

The results of estimating the OECD’s product market regulation (PMR) indicators suggest that, despite improvements in some areas, many aspects of Russia’s regulatory framework are still restrictive and economic performance could be enhanced by bringing regulation into line with best practice. In particular, the scores indicate that reducing the role of the state-enterprise sector in markets that are inherently competitive and reinvigorating efforts to liberalise foreign trade and direct investment regimes would benefit economic performance. In some network sectors, recent regulatory changes have improved the scope for competition. However, ongoing work needs to focus on separating competitive and monopoly market segments and eliminating barriers to entry. In addition, the authorities need to develop the capacity and strengthen the hands of the sectoral regulators. Introducing an overarching competition policy would also help bring the issue of competition to centre stage and spread a competition ethos through different levels of government.


How to obtain this publication


The complete edition of the Economic Survey of Russia is available from:

The Policy Brief (pdf format) can be downloaded in English. It contains the OECD assessment and recommendations.


Additional information

For further information please contact the Russia Desk at the OECD Economics Department at

The OECD Secretariat's report was prepared by Geoff Barnard, Roland Beck, Paul Conway and Tatiana Lysenko under the supervision of Andreas Wörgötter. Research assistance was provided by Corinne Chanteloup.




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