By nigratan nigroll.com2 min
February 12, 2024
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Tightening Western sanctions, cutting off gas to European countries and falling prices on world commodity markets have hit export revenues of the Russian economy.
In 2023, revenues to Russia from the export of goods abroad decreased by 28%, the Federal Customs Service reported on Monday. The final volume of export revenue—$425.1 billion—was the lowest since the 2020 pandemic, and collapsed by $167.4 billion relative to the first year of the war.
Almost all key items of Russian exports were in the red, as follows from FCS statistics. Sales abroad of mineral raw materials - the main source of export revenues of the economy - brought in $260.1 billion for the year. Compared to the first year of the war, raw material revenues decreased by 34% after oil companies were forced to provide double-digit discounts to the few remaining buyers, and Gazprom stopped supplying most European customers. At the end of the year, the gas monopoly’s exports became the lowest since 1985, and production volumes fell to the lowest level in the company’s history.
Revenues from metal exports dropped by 15%, to $60 billion; chemical products - by 35%, to $27.2 billion; wood and its processed products - by 30%, to $9.9 billion, follows from statistics from the Federal Customs Service. Export of high value-added products - machinery and equipment - amounted to a meager 5% of export revenues. And despite President Vladimir Putin’s statements that Russia has ceased to be a “gas station economy,” its volumes decreased sharply compared to 2022—by 25%, to $22.9 billion.
The only export item for which the Federal Customs Service was able to record a slight increase in income was food and agricultural raw materials: these goods brought in $43.1 billion in revenue, which is 4.3% more than a year earlier.
Supplies of Russian goods to Europe, once the largest sales market, according to customs statistics, decreased threefold, to $84.9 billion. And three-quarters of all exports—$306.6 billion—went to Asian countries, mainly China.
However, such a “turn to the East” is associated with serious risks, experts from the Gaidar Institute wrote at the end of last year. While China is Russia’s main trading partner (41% of imports and 26% of exports), the role of the Russian Federation for China is incomparably smaller. Russian goods account for 5.1% of Chinese imports, and the Russian sales market accounts for 3.3% of Chinese exports.
This preserves the risks of a decrease in trade in the event of secondary sanctions: if the West puts China before a choice between it and Russia, the answer may not be in Moscow’s favor, the Gaidar Institute believes.