Economic Contribution of the Financial Sector to the Russian Economy with I-O Analysis

After the outbreak of the Russia-Ukraine War in February 2022, Russia was effectively cut off from the global financial system by being kicked out of the SWIFT payment network. Consequently, the development of the financial market has become an urgent task for Russia. In this paper, an inter-industry analysis was conducted for countries in transition, such as Russia, the Czech Republic, 경Poland, and Kazakhstan, using input-output tables from 1999 to 2018 provided by the OECD. According to the research findings, the financial industries of the four countries showed relatively high forward linkage effects and low backward linkage effects. In other words, they are categorized as intermediate-demand primitive industries. In addition, the Russian financial industry was found to have the following characteristics. First, it does not yet account for a large portion of the national economy and has experienced ups and downs due to economic fluctuations, but is growing relatively steadily. Second, although the financial industry is not a core industry in the Russian economy, it is of great importance because of its relatively high-added value and production support effect of other industries. Third, given the growing support effect of other industries, it is likely that the higher productivity and efficiency in the financial market will contribute to the competitiveness of other industries. This suggests the need to increase the proportion of the Russian financial industry in the national economy. In this context, the policy for the efficient development of the financial market implemented by the Russian government appears to be desirable. In particular, if the efficiency of the financial sector is improved and costs are reduced through the development of fintech, it will contribute more to the growth of other industries and the national economy.