The report “Russia and the World: 2018. Annual Forecast: Economy and Foreign Policy” continues the series of yearly publications of the Primakov National Research Institute of World Economy and International Relations (IMEMO) and Foundation for Prospective Studies and Initiatives. 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, India) economic trends in 2017-2018, including international financial markets and main Russian export markets. The report is based on the decades long IMEMO experience in forecast research. Part II presents the forecast of international relations for 2018, it analyzes main challenges for Russia and options to respond them.