Russia’s Shrinking Economy

According to a recent article of Yahoo! News, Russia’s economy is shrinking. There are different factors attributing to the country’s failing economy: the decrease in oil prices, Western economic sanctions after its invasion of Ukraine, and the collapse of the country’s local currency resulting from the said sanctions.

Based on the World Bank’s GPD ranking last year 2013, Russia is the world’s eighth largest economic power with 2,096,777 billions of US dollars. Now, Russia’s GPD has shrunk so low because of the economic crisis it’s facing that it has forfeited its title and is estimated to be almost the same as Spain’s economic weight.

Last year, Spain was the 13th country with the biggest economy on the planet with 1,358,263 billions of US dollar. Spain has always been considered as one of the country in Europe with a weak economy and the unemployment ratio of 1:4 is evidence to that.

Here is the list of the World Bank’s GPD last year provided by Yahoo! News. These are in billions of US dollars:

(European Union 17,350,853)

1. United States 16,800,000
2. China 9,240,270
3. Japan 4,901,530
4. Germany 3,634,823
5. France 2,734,949
6. UK 2,521,381
7. Brazil 2,245,673
8. Russia 2,096,777
9. Italy 2,071,307
10 . India 1,876,797
11 . Canada 1,826,769
12. Australia 1,560,597
13 . Spain 1,358,263
14 . S Korea 1,304,554
15 . Mexico 1,260,915

Russia’s GPD value is not clear these days because of the sudden changes in its value of currency, the ruble, therefore the need to compute it every day.

According to Forbes, Russia’s economy is expected to fall into a recession next year. Russia is being punished for its involvement in Ukraine therefore affecting some of its projects namely the South Stream gas pipeline project which was cancelled. Russia may be winning more in the field of real estate but it is costing them other things
especially their standing in the economy.

Russia’s economy is oil-dependent so this may not be permanent. As soon as the price of oil goes back up, Russia will again regain its rank in the GPD ranking.

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