The report  «Russia in the World: 2008. Annual Forecast: Economy and Foreign Policy» continues the series of yearly publications of the Institute of World Economy and International Relations (IMEMO), Russian Academy of Science. It consists of two parts: «Economy» and «Foreign Policy». Part I focuses upon Russian foreign trade-economic relations and analysis and forecast of the world ( Russia, Europe, the USA, Japan) economic trends in 2007-2008, including international financial markets and main Russian export markets. The report is based on the IMEMO experience in forecast research. Part II presents the forecast of international relations for 2008, it analyses the main challenges for Russia and options to respond to them.