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European Union vs. Russia

Economy

European UnionRussia
Economy - overview

The 27 member states that make up the EU have adopted an internal single market with free movement of goods, services, capital, and labor. The EU, which is also a customs union, aims to bolster Europe's trade position and its political and economic weight in international affairs.

 

Despite great differences in per capita income among member states (from $28,000 to $109,000) and in national attitudes toward issues like inflation, debt, and foreign trade, the EU has achieved a high degree of coordination of monetary and fiscal policies. A common currency - the euro - circulates among 19 of the member states that make up the European Economic and Monetary Union (EMU). Eleven member states introduced the euro as their common currency on 1 January 1999 (Greece did so two years later). Since 2004, 13 states acceded to the EU. Of the 13, Slovenia (2007), Cyprus and Malta (2008), Slovakia (2009), Estonia (2011), Latvia (2014), and Lithuania (2015) have adopted the euro; seven other member states - excluding Denmark, which has a formal opt-out - are required by EU treaties to adopt the common currency upon meeting fiscal and monetary convergence criteria.

 

The EU economy posted moderate GDP growth for 2014 through 2017, capping five years of sustained growth since the 2008-09 global economic crisis and the ensuing sovereign debt crisis in the euro zone in 2011. However, the bloc's recovery was uneven. Some EU member states (Czechia, Ireland, Malta, Romania, Sweden, and Spain) recorded strong growth, others (Italy) experienced modest expansion, and Greece finally ended its EU rescue program in August 2018. Overall, the EU's recovery was buoyed by lower commodities prices and accommodative monetary policy, which lowered interest rates and stimulated demand. The euro zone, which makes up about 70% of the total EU economy, performed well, achieving a growth rate not seen in a decade. In October 2017 the European Central Bank (ECB) announced it would extend its bond-buying program through September 2018, and possibly beyond that date, to keep the euro zone recovery on track. The ECB's efforts to spur more lending and investment through its asset-buying program, negative interest rates, and long-term loan refinancing programs have not yet raised inflation in line with the ECB's statutory target of just under 2%.

 

Despite its performance, high unemployment in some member states, high levels of public and private debt, muted productivity, an incomplete single market in services, and an aging population remain sources of potential drag on the EU's future growth. Moreover, the EU economy remains vulnerable to a slowdown of global trade and bouts of political and financial turmoil. In June 2016, the UK voted to withdraw from the EU, the first member country ever to attempt to secede. Continued uncertainty about the implications of the UK's exit from the EU (concluded January 2020) could hurt consumer and investor confidence and dampen EU growth, particularly if trade and cross-border investment significantly declines. Political disagreements between EU member states on reforms to fiscal and economic policy also may impair the EU's ability to bolster its crisis-prevention and resolution mechanisms. International investors' fears of a broad dissolution of the single currency area have largely dissipated, but these concerns could resurface if elected leaders implement policies that contravene euro-zone budget or banking rules. State interventions in ailing banks, including rescue of banks in Italy and resolution of banks in Spain, have eased financial vulnerabilities in the European banking sector even though some banks are struggling with low profitability and a large stock of bad loans, fragilities that could precipitate localized crises. Externally, the EU has continued to pursue comprehensive free trade agreements to expand EU external market share, particularly with Asian countries; EU and Japanese leaders reached a political-level agreement on a free trade agreement in July 2017, and agreement with Mexico in April 2018 on updates to an existing free trade agreement.

Russia has undergone significant changes since the collapse of the Soviet Union, moving from a centrally planned economy towards a more market-based system. Both economic growth and reform have stalled in recent years, however, and Russia remains a predominantly statist economy with a high concentration of wealth in officials' hands. Economic reforms in the 1990s privatized most industry, with notable exceptions in the energy, transportation, banking, and defense-related sectors. The protection of property rights is still weak, and the state continues to interfere in the free operation of the private sector.

Russia is one of the world's leading producers of oil and natural gas, and is also a top exporter of metals such as steel and primary aluminum. Russia is heavily dependent on the movement of world commodity prices as reliance on commodity exports makes it vulnerable to boom and bust cycles that follow the volatile swings in global prices. The economy, which had averaged 7% growth during the 1998-2008 period as oil prices rose rapidly, has seen diminishing growth rates since then due to the exhaustion of Russia's commodity-based growth model.

A combination of falling oil prices, international sanctions, and structural limitations pushed Russia into a deep recession in 2015, with GDP falling by close to 2.8%. The downturn continued through 2016, with GDP contracting another 0.2%, but was reversed in 2017 as world demand picked up. Government support for import substitution has increased recently in an effort to diversify the economy away from extractive industries.

GDP (purchasing power parity)$19,885,625,000,000 (2019 est.)

$19,551,328,000,000 (2018 est.)

$19,115,988,000,000 (2017 est.)

note: data are in 2017 dollars
$3,968,180,000,000 (2019 est.)

$3,915,637,000,000 (2018 est.)

$3,818,780,000,000 (2017 est.)

note: data are in 2010 dollars
GDP - real growth rate2.3% (2017 est.)

2% (2016 est.)

2.3% (2015 est.)
1.34% (2019 est.)

2.54% (2018 est.)

1.83% (2017 est.)
GDP - per capita (PPP)$44,436 (2019 est.)

$43,761 (2018 est.)

$42,848 (2017 est.)

note: data are in 2017 dollars
$27,044 (2019 est.)

$26,668 (2018 est.)

$26,006 (2017 est.)

note: data are in 2010 dollars
GDP - composition by sectoragriculture: 1.6% (2017 est.)

industry: 25.1% (2017 est.)

services: 70.9% (2017 est.)
agriculture: 4.7% (2017 est.)

industry: 32.4% (2017 est.)

services: 62.3% (2017 est.)
Population below poverty line9.8% (2013 est.)

note: see individual country entries of member states
12.6% (2018 est.)
Household income or consumption by percentage sharelowest 10%: 2.8%

highest 10%: 23.8% (2016 est.)
lowest 10%: 2.3%

highest 10%: 32.2% (2012 est.)
Inflation rate (consumer prices)1.1% (2019 est.)

1.7% (2018 est.)

1.5% (2017 est.)
4.4% (2019 est.)

2.8% (2018 est.)

3.7% (2017 est.)
Labor force238.9 million (2016 est.)69.923 million (2020 est.)
Labor force - by occupationagriculture: 5%

industry: 21.9%

services: 73.1% (2014 est.)
agriculture: 9.4%

industry: 27.6%

services: 63% (2016 est.)
Unemployment rate8.6% (2016 est.)

9.4% (2015 est.)
4.6% (2019 est.)

4.8% (2018 est.)
Distribution of family income - Gini index30.8 (2016 est.)

31 (2015 est.)
37.5 (2018 est.)

41.9 (2013)
Industriesamong the world's largest and most technologically advanced regions, the EU industrial base includes: ferrous and non-ferrous metal production and processing, metal products, petroleum, coal, cement, chemicals, pharmaceuticals, aerospace, rail transportation equipment, passenger and commercial vehicles, construction equipment, industrial equipment, shipbuilding, electrical power equipment, machine tools and automated manufacturing systems, electronics and telecommunications equipment, fishing, food and beverages, furniture, paper, textilescomplete range of mining and extractive industries producing coal, oil, gas, chemicals, and metals; all forms of machine building from rolling mills to high-performance aircraft and space vehicles; defense industries (including radar, missile production, advanced electronic components), shipbuilding; road and rail transportation equipment; communications equipment; agricultural machinery, tractors, and construction equipment; electric power generating and transmitting equipment; medical and scientific instruments; consumer durables, textiles, foodstuffs, handicrafts
Industrial production growth rate3.5% (2017 est.)-1% (2017 est.)
Agriculture - productswheat, barley, oilseeds, sugar beets, wine, grapes; dairy products, cattle, sheep, pigs, poultry; fishwheat, sugar beet, milk, potatoes, barley, sunflower seed, maize, poultry, oats, soybeans
Exports$7,102,345,000,000 (2019 est.)

$6,929,845,000,000 (2018 est.)

$6,690,764,000,000 (2017 est.)

note: external exports, excluding intra-EU trade
$551.128 billion (2019 est.)

$564.314 billion (2018 est.)

$534.657 billion (2017 est.)
Exports - commoditiesmachinery, motor vehicles, pharmaceuticals and other chemicals, fuels, aircraft, plastics, iron and steel, wood pulp and paper products, alcoholic beverages, furniturecrude petroleum, refined petroleum, natural gas, coal, wheat, iron (2019)
Exports - partnersUnited States 20.7%, China 9.6%, Switzerland 8.1%, Turkey 4.4%, Russia 4.1% (2016 est.)China 14%, Netherlands 10%, Belarus 5%, Germany 5% (2019)
Imports$6,649,513,000,000 (2019 est.)

$6,400,412,000,000 (2018 est.)

$6,177,446,000,000 (2017 est.)

note: external imports, excluding intra-EU trade
$366.919 billion (2019 est.)

$355.022 billion (2018 est.)

$345.926 billion (2017 est.)
Imports - commoditiesfuels and crude oil, machinery, vehicles, pharmaceuticals and other chemicals, precious gemstones, textiles, aircraft, plastics, metals, shipscars and vehicle parts, packaged medicines, broadcasting equipment, aircraft, computers (2019)
Imports - partnersChina 20.1%, United States 14.5%, Switzerland 7.1%, Russia 6.3% (2016 est.)China 20%, Germany 13%, Belarus 6% (2019)
Debt - external$29.27 trillion (31 December 2016 est.)

$28.68 trillion (31 December 2015 est.)
$479.844 billion (2019 est.)

$484.355 billion (2018 est.)
Exchange rateseuros per US dollar -

0.885 (2017 est.)

0.903 (2016 est.)

0.9214 (2015 est.)

0.885 (2014 est.)

0.7634 (2013 est.)
Russian rubles (RUB) per US dollar -

73.7569 (2020 est.)

63.66754 (2019 est.)

66.2 (2018 est.)

60.938 (2014 est.)

38.378 (2013 est.)
Fiscal yearNAcalendar year
Public debt86.8% of GDP (2014)

85.5% of GDP (2013)
15.5% of GDP (2017 est.)

16.1% of GDP (2016 est.)

note: data cover general government debt and include debt instruments issued (or owned) by government entities other than the treasury; the data include treasury debt held by foreign entities; the data include debt issued by subnational entities, as well as intragovernmental debt; intragovernmental debt consists of treasury borrowings from surpluses in the social funds, such as for retirement, medical care, and unemployment, debt instruments for the social funds are not sold at public auctions
Reserves of foreign exchange and gold$740.9 billion (31 December 2014 est.)

$746.9 billion (31 December 2013)

note: data are for the European Central Bank
$432.7 billion (31 December 2017 est.)

$377.7 billion (31 December 2016 est.)
Current Account Balance$404.9 billion (2017 est.)

$359.7 billion (2016 est.)
$65.311 billion (2019 est.)

$115.68 billion (2018 est.)
GDP (official exchange rate)$17.11 trillion (2017 est.)$1,702,361,000,000 (2019 est.)
Credit ratingsFitch rating: AAA (2010)

Moody's rating: Aaa (2014)

Standard & Poors rating: AA (2016)
Fitch rating: BBB (2019)

Moody's rating: Baa3 (2019)

Standard & Poors rating: BBB- (2018)
Taxes and other revenues45.2% (of GDP) (2014)16.4% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)-3% (of GDP) (2014)-1.4% (of GDP) (2017 est.)
Unemployment, youth ages 15-24total: 16.8%

male: 16.8%

female: 16.9% (2019 est.)
total: 15.2%

male: 14.8%

female: 15.6% (2019 est.)
GDP - composition, by end usehousehold consumption: 54.4% (2016 est.)

government consumption: 20.4% (2016 est.)

investment in fixed capital: 19.8% (2016 est.)

investment in inventories: 0.4% (2016 est.)

exports of goods and services: 43.9% (2016 est.)

imports of goods and services: -40.5% (2016 est.)
household consumption: 52.4% (2017 est.)

government consumption: 18% (2017 est.)

investment in fixed capital: 21.6% (2017 est.)

investment in inventories: 2.3% (2017 est.)

exports of goods and services: 26.2% (2017 est.)

imports of goods and services: -20.6% (2017 est.)
Gross national saving22.7% of GDP (2017 est.)

22.2% of GDP (2016 est.)

22% of GDP (2015 est.)
27.6% of GDP (2019 est.)

30% of GDP (2018 est.)

25.7% of GDP (2017 est.)

Source: CIA Factbook