New Data Confirms the Basic Relationships in the Russian Economy: Ten Years of the New Economic System Revisited

Tuesday, March 26, 2002

Recent official Russia data indicate that in 2001 Russian gross domestic product (GDP) grew by 5 percent. The revised growth rate for 2000 is 9 percent. The beginning of 2002 marks ten years since the onset of policy based on the triad of stabilization, liberalization, and privatization. By 2002, the index of real GDP relative to 1991 (taken as 100) stood as 71.9. Cumulatively, during this ten-year period, 1992-2001, Russian GDP fell by almost 30 percent. By comparison with the U.S., this is equivalent to the depth of the Great Depression. In the Russian context, a GDP decline of 30 percent amounts to a recovery since the same index of real GDP was 60.7 at the end of 1998.