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Russian Federation

The Russian Federation is a vast Eurasian economy with the world’s largest land area and a strong foundation in energy exports. In 2024, its nominal GDP totaled approximately USD 2.41 trillion, with real GDP growth revised upward to around 4.3%, buoyed by robust government spending and wartime stimulus. However, 2025 forecasts anticipate a marked slowdown—growth is expected to slow to 1%–2%, with some projections at 0.9% due to rising inflation, tightened monetary policy, falling oil revenues, and dwindling reserves.

 

Economic overview

Russia’s economy remains heavily driven by military-related fiscal stimulus, consumer demand, and manufacturing—especially in the defense sector. While real wages rose sharply, inflation surged above 9%, prompting the central bank to raise interest rates to a two-decade high of 21%. Despite past growth, the economic model faces demand-supply bottlenecks, heightened borrowing costs, and deteriorating energy export revenues.

 

Key economic indicators

  • Nominal GDP (2024): ~USD 2.41 trillion

  • Real GDP growth (2024): ~4.3%; projected for 2025: ~1–2% (some estimates at 0.9%)

  • Inflation (2024): ~9–10%; Q2 2025: ~4.8% after monetary tightening

  • Interest rate peak: 21% in late 2024, easing slightly in 2025

  • Real wage growth and tight labor market; unemployment around historic lows

 

Business environment

The economic landscape is shaped by sanctions, wartime budgetary pressures, and state-led support through subsidies, preferential loans, and asset seizures (raising billions). The civilian sector is increasingly constrained by limited import access, high costs, and technology gaps, while the defense-driven economy struggles with sustainability.

 

Key sectors for investment

  • Energy and raw materials: historically dominant but revenue-constrained by global price falls

  • Military-technological and import-substitution industries: growth areas with state backing

  • Regional manufacturing: especially metallurgy, optics, and electronics

  • Domestic consumption and selective infrastructure driven by fiscal support

 

Investment advantages

  • Massive domestic market and substantial energy and military-industrial capacity

  • Highly skilled labor base in select sectors

  • Strong government support in strategic industries

 

Risks and constraints

  • Elevated political and geopolitical risk amid sanctions and war economy

  • Weakening energy revenues and pressure on public finances

  • High inflation, tight credit, and slowing macroeconomic momentum

  • Structural instability and diminishing foreign investment confidence

 

Conclusion

Russia remains a resource-rich, strategically significant economy with ongoing state-led economic activity. However, its war-driven model increasingly strains macroeconomic stability, with declining energy revenues, rising economic vulnerabilities, and geopolitical risks.

If you are interested in exploring business and investment opportunities in the United Arab Emirates, EurAsia Gulf is well-positioned to assist you. Our extensive network of connections within both government and private sectors allows us to provide you with valuable insights and guidance. Our team of experts is dedicated to offering tailored consultations to meet your specific needs.

For more information or to schedule a consultation, please feel free to contact us at info@eurasiagulf.org