М ]ф

18th Annual Meeting of the American-Russian Business Council

Deputy Minister of FinanceRussian Federation

Alexander Novak

October 21, 2010 San Francisco

М ]ф Main Indicators, seasonally adjusted(index 2008=100)

22

GDP Industrial Production

Investments Retail Trade

М ]ф

88

90

92

94

96

98

100

102

104

I II III IV I II III IV I II

2008 2009 2010

III IV I II III IV I II III IV

1998 1999

1997-1999Q4 1997=100

2008-2010Q2 2008=100

Seasonally adjusted GDP Growth Rate

33

М ]ф

70

75

80

85

90

95

100

105

110

115

120

IV I II III IV I II III IV I II III IV I II

2006 2007 2008 2009 2010

Japan

Germany

USA

Euroarea

Developed Countries, GDP Growth Rate (related to Q4 2006)

44

М ]ф

55

The recovery of investment activity sharply shifted into low gear in 2010

М ]ф

66

index 2008=100, seasonally adjusted

92

94

96

98

100

102

104

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8

2008 2009 2010

Retail trade turnover Real wages

Consumption is the main driver of growth in 2010. Retail trade turnover is supported by the population income growth and reduction of the savings rate…

М ]ф

-20

-15

-10

-5

0

5

10

15

20

I II III IV I II III IV I II III IV I II III IV I II III IV I II III IV I II III

2004 2005 2006 2007 2008 2009 2010

Domestic production for internal marketDomestic demand

Domestic demand

Contribution to domestic demand growth, % YoY

77

….at the same time domestic demand growth has become more import oriented

М ]фOil prices provided for the most part of the post-crisis growth.Dependence of the economy on oil grew significantly.

88

% USD/barrel

• share of the oil and gas sector grew from 14% of GDP in 1998 to 21% of GDP in 2008.• share of oil and gas revenues in the federal budget grew from 15% in 1998 to 47% in 2008.

65

70

75

80

85

90

95

100

105

110

115

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

20

30

40

50

60

70

80

90

100

GDP, index 2008=100 Urals price, USD/barrel (rhs)

М ]ф

%

GDP growth is likely to stabilize at around 4% during the next 3 years

99

М ]ф

-6

-4-2

02

4

68

10

1214

1618

20

2007 2008 2009 2010 2011 2012 2013

gro

wth

, %labor productivity real wages

0

2

4

6

8

10

12

14

16

18

20

2007200820092010201120122013

gro

wth

, %

GDP deflator CPI

10

In the forecast period labor productivity growth will be comparable with the wages growth.

М ]ф

95,8

98,8 99,0

96,1

93,8

92,0

105,2 105,0

109,1

113,9

96,9

100,8

90

91

92

93

94

95

96

97

98

99

100

2008 2009 2010 2011 2012 2013

90

95

100

105

110

115

120

GDP energy intensity, 2007=100 (lhs) GDP growth, 2007=100 (rhs)

% %

Improvement of the energy efficiency and structural changes in the economy will provide for decline in the energy intensity of the economy by 2-3% annually.

11

М ]ф

2009 2010 2011 2012 2013

Urals, USD/barrel 61,1 75 76 78 79

GDP, % -7,9 4,0 4,2 3,9 4,5

Inflation, % Dec/Dec 8,8 7-8 6-7 5-6 4,5-5,5

Manufacturing, % -9,3 7,6 3,9 3,8 4,9

Investment, % -16,2 2,5 10,0 3,5 7,4

Real wage, % -3,5 4,9 3,5 4,0 4,7

Real disposable income, % 2,3 4,4 3,6 3,6 4,2

Exports, bln. USD 303 378 389 412 432

Imports, bln.USD 192 241 278 303 334

М ]ф 13

Federal Budget Revenues (bln. rub.)

9 275,9

7 337,87 860,9

8 844,69 503,5

10 379,9

0,0

1 000,0

2 000,0

3 000,0

4 000,0

5 000,0

6 000,0

7 000,0

8 000,0

9 000,0

10 000,0

11 000,0

2008 2009 2010 2011 2012 2013

-20,9%

+7,1%

+12,5%

+7,5%

+9,2% 112%

2008 2009 2010 2011 2012 2013

USD bln.

373,1 230,5 258,6 290,0 309,6 334,8

М ]ф 14

Federal Budget Revenues(real terms, 2008 = 100%)

0,0

20,0

40,0

60,0

80,0

100,0

2008 2009 2010 2011 2012 2013

100,0%

72,7% 72,1%76,2% 77,2% 80,0%

М ]ф 15

Federal Budget Expenditure (bln. rub.)

7 570,9

9 660,110 232,8

10 658,611 237,9

12 175,6

0,01 000,02 000,03 000,04 000,05 000,06 000,07 000,08 000,09 000,0

10 000,011 000,012 000,0

2008 2009 2010 2011 2012 2013

+27,6%

+5,9%+4,2%

+5,4%

+8,3%

2008 2009 2010 2011 2012 2013

USD bln. 304,6 303,5 336,6 349,5 366,1 392,8

М ]ф 16

100,0

117,3 115,0 112,5 111,9 114,9

0,0

20,0

40,0

60,0

80,0

100,0

120,0

140,0

160,0

2008 2009 2010 2011 2012 2013

Federal Budget Expenditure(real terms, 2008 = 100%)

М ]ф 17

Deficit (Proficit) of the Federal Budget (% of GDP)

4,1

-5,9-5,3

-3,6-3,1 -2,9

-1,5

0,0

-7,0

-5,0

-3,0

-1,0

1,0

3,0

5,0

2008 2009 2010 2011 2012 2013 2014 2015

М ]ф 18

Sources for Federal Budget Deficiency Payment (bln. rub.)

59,8%

86,3%

15,7%

0,1%

0,3%

16,4%

15,9% 17,2%

13,6%

39,9%

67,9%

84,1% 82,8%

-2 500,0

-2 000,0

-1 500,0

-1 000,0

-500,0

0,0

2009 2010 2011 2012 2013

Reserves fund Privatization Other sources

-2 322,3 -2 371,9

-1 814,0-1 734,4 -1 795,7

2009 2010 2011 2012 2013

USD bln. -73,0 -78,0 -59,5 -56,5 -57,9

М ]ф 19

Volume of Borrowings (bln. rub.)

272,4

518,9

1 270,9

1 931,5

2 245,22 323,9

687,2593,4

498,6337,0

203,5215,5

0,0

200,0

400,0

600,0

800,0

1 000,0

1 200,0

1 400,0

1 600,0

1 800,0

2 000,0

2 200,0

2 400,0

2008 2009 2010 2011 2012 2013

Borrowings Payments

  2008 2009 2010 2011 2012 2013Net borrowings 56,9 315,4 933,9 1 432,9 1 651,8 1 636,7

2008 2009 2010 2011 2012 2013

Borrowings, USD bln. 10,9 16,4 41,8 63,3 731 75,0

Payments, USD bln. 8,6 6,4 11,1 16,3 19,3 22,2

Net borrowings, USD bln.

2,3 10,0 30,7 47,0 53,8 52,8

М ]ф 20

Privatization Revenues of the Federal Budget (bln. rub.)

6,7 2,0 7,0

298,0

276,1

309,4

0,0

50,0

100,0

150,0

200,0

250,0

300,0

2008 2009 2010 2011 2012 2013

2008 2009 2010 2011 2012 2013

USD bln. 0,27 0,07 0,23 9,8 9,0 10,0

М ]ф 21

778,5 млрд. руб.

2 094,7млрд. руб.

3 280,8млрд. руб.

4 256,3млрд. руб.

4 740,7млрд. руб.

1 064,9млрд. руб. 1 301,2

млрд. руб.1 499,8

млрд. руб.

875,4 млрд. руб.

3 166,3 млрд. руб.

2 201,4млрд. руб.

1 138,4млрд. руб.

1 796,8млрд. руб.

2 327,9млрд. руб.

2 884,5млрд. руб.

1 101,7млрд. руб.

1 370,5млрд. руб. 1 192,0

млрд. руб.

Russian Federation Volume of Debt

% o

f G

DP

0,0%

5,0%

10,0%

15,0%

20,0%

25,0%

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

External debt Internal debt

23,2%

14,2%

9,0%

7,2%6,5%

8,3%

11,0%

13,6%

16,0%

18,0%

778,5 bln.rub.

3 166,3 bln.rub.

875,4 bln.rub.

2 201,4 bln.rub.

1 064,9 bln.rub.

1 370,5 bln.rub.

1 301,2 bln.rub.

1 101,7 bln.rub.

1 499,8 bln.rub.

1 192,2 bln.rub.

2 094,7 bln.rub.

1 138,4 bln.rub.

3 499,4* bln.rub.

1 485,0* bln.rub.

5 148,4* bln.rub.

1 696,3* bln.rub.

6 976,4* bln.rub.

2 000,4* bln.rub.

8 826,3* bln.rub.

2 344,1* bln.rub.

* Forecast as of Oct. 6, 2010

М ]ф

Budget Allocations on Innovative Development Programs (bln. rub.)

22

2010 2011 2012 2013

Federal Special Vehicle on Innovations

454,4 604,3 630,4 668,3USD bln.

15,0 19,8 20,5 21,6

in % compared to the previous period 133,0 104,3 106,0

plus:

Innovation Center of Skolkovo 15,0 22,0 17,1

USD bln. 0,5 0,7 0,6

Projects of the President’s Special Commission on Modernization and Technological Development of the Russian Federation

5,0 10,0 10,0 6,3

USD bln. 0,2 0,3 0,3 0,2

М ]ф

Thank you for your attention!