GGP of Russia for the past year - Essay Example

RUSSIA AND GDP Gross Domestic Product is one of the most important economic indicators. It measures the economic output of a country’s economy, the dollar value of all goods and service produced within a country’s markets. The larger the GDP, the large and more productive is a country’s economy. Usually GDP is calculated with the following formula: consumption plus gross investment plus government spending plus (exports minus imports). This will usually bring a good idea of the country’s economic output—however, it is important to remember that most countries have black or grey economies that are hard to measure.

This is especially the case in Russia. When GDP shrinks, that means a country’s economy is in serious trouble and a recession is looming. As the world continues to freefall in the current economic crisis, many country’s GDPs are shrinking. Russia, which for many years had been riding the recent increase in energy prices, has an economy and GDP which have been growing substantially over the last few years; however, this may not continue because of the way energy prices have seriously tumbled.

The Gross Domestic Product of Russia is $1.29 trillion. This is one of the largest GDPs in the world, definitely in the top fifteen of all countries. It grew 5.8 per cent in 2008 which was one of the lowest rates of growth in several years and was largely due to the decrease in the price of oil and other resource of which Russia has a lot. Now the IMF has been predicting that the Russian economy will contract 0.7% in 2009 which is very bad for Russians who are hoping to see their country continue to grow and become more powerful.

1 Part of the problem is that the Russian economy is not very diversified. Unlike more developed economies that have a good mix between resources, manufacturing, and services—Russia mostly exports gas and minerals and not much else. That means the economy is very dependent on international prices which it has little control over. A Russia continues to develop hopefully its economy will become more diversified.