Solid broad-based recovery underway

C3

SENSITIVE RISK for enterprise

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

  • Economic risk

  • Business environment risk

  • Political risk

  • Commercial risk

  • Financing risk

Last updated in July 2021

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GDP
USD1483.5bn (World ranking 10, World Bank 2020)
Population
144.1mn (World ranking 9, World Bank 2020)
Form of state Federation
Head of government Vladimir Vladimirovich PUTIN (President)
Next elections 2024, Presidential
  • Abundant natural resources, in particular oil and gas
  • More than 20 years of continued current account surpluses (including the crisis years 2009, 2015-2016 and 2020)
  • Low public debt
  • Comfortable foreign exchange reserves
  • Far-reaching structural reforms still outstanding
  • High vulnerability to global oil price shocks
  • Prone to capital flight
  • Exchange rate remains vulnerable to volatility and sudden depreciation
  • Poor rule of law and high level of perceived corruption
  • Geopolitical risks: Conflict with Ukraine and serious dispute with the West over that conflict (including sanctions and counter-sanctions). Also involved in Syria crisis

Trade structure by destination/origin

(% of total, annual 2020)

Exports Rank Imports
China 14.3%
1
23.2% China
Netherlands 7.3%
2
11.0% Germany
United Kingdom 6.7%
3
5.6% Belarus
Germany 5.4%
4
4.0% Italy
Belarus 4.6%
5
4.0% United States

Trade structure by product

(% of total, annual 2020)

Exports Rank Imports
Petroleum, petroleum products and related materials 42.1%
1
9.2% Road vehicles
Iron and steel 7.6%
2
7.9% Other industrial machinery and parts
Non-ferrous metals 6.1%
3
7.0% Electrical machinery, apparatus and appliances, n.e.s.
Coal, coke and briquettes 4.4%
4
4.9% Specialised machinery
Cereals and cereal preparations 3.3%
5
4.9% Telecommunication and sound recording apparatus
The payment behavior of domestic firms is often poor and the businesses themselves have complex legal structures. Payment terms are not fully regulated and Russian counterparties try to renegotiate conditions, requesting postponement of payments or ignoring contractual obligations.

  • Low

  • Medium

  • Sensitive

  • High

  • Payments

  • Court proceedings

  • Insolvency proceedings

  • Payments

  • Court proceedings

  • Insolvency proceedings

Courts can be fairly efficient when a debt is certain and undisputed, but legal proceedings may otherwise be complex (no default judgments, no fast track proceedings above EUR 4,000 even if the debt is certain and undisputed) and cannot be avoided through Alternative Dispute Resolution methods(which is not relied upon) or through foreign courts (since Russian courts apply extremely strict jurisdictional exclusivity rules).

Insolvency proceedings ought to be avoided. A debt renegotiation mechanism isindeed available, although it is unused in practice. Liquidation is therefore the default procedure, but unsecured creditors would have very limited chances of recovering their debt.

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