Russia has a poorly diversified export structure, which includes oil and gas; coke and refined petroleum products; Metals, chemicals, chemical products and coal. An EU ban on its imports will reduce Russian exports by 135 billion euros, according to estimates by the Polish Economic Institute.
PIE analysts noted that the so-called final demand from the European Union, the United States, Japan and Great Britain for goods and services containing Russian added value is responsible for about 14 percent. The GDP of Russia, and beyond including Turkey, North Korea and Canada – up to 16 percent. This means that this part of Russia’s GDP reaches Western countries directly or indirectly.
It was noted that the demand of EU countries for value-added goods and services produced in Russia is about 10%. – The largest are in Germany (2.2%), Italy and France (1% each). Poland is responsible for 0.8 percent. Russian GDP. Experts noted that the very high share of China in the creation of Russia’s GDP is due to large oil exports from Russia and the fact that China consumes goods containing Russian added value, which are produced not only in China, but also in other countries, for example. German cars, American machines.”
In terms of added value, products and services related to the energy raw materials themselves, which are exported from Russia and ultimately end up in the European Union, account for 58 percent. Russian added value delivered from Russia to the European Union. It was noted that “this represents up to a fifth of the total value added exported by Russia”.
Analysts noted that for the EU, the average percentage of GDP generated by Russia’s final demand for EU value-added goods and services is about 0.7 percent. He assessed that “this means that sensitivity to retaliation and difficulties in exports to Russia will have a limited impact on the EU economy.”
Cyprus is largely dependent on the Russian economy, “which produces 5.6% of GDP thanks to the final Russian demand for Cypriot value-added goods and services.” As explained by PIE, this is largely due to investments and financial services – Cyprus is the European Union’s gateway to Russian capital.
She added that “80% of the added value of Cyprus goes to Russia in the service sectors.” This means that Cyprus has already largely incurred the costs of the sanctions imposed on the Russian banking sector, she added. “The ban on the export and import of goods should be less worrying,” he assessed. Notable dependence (more than 2%) was also observed in the Baltic states and Bulgaria. On the other hand, Russia has little importance in the British and American economy.
The European Union is the largest recipient of Russian goods. In 2020, 33.8% went to the European Union. Russian exports – more than double those to China (15%). Another 6.9 percent is exported to Great Britain. Russian production, 3.3 percent to the United States.
Experts noted that Russia has a poorly diversified export structure. “In 2021, more than 75% of exports accounted for only 5 product groups: oil, gas, coke, refined petroleum products, metals and chemicals, chemical products and coal,” she added. PIE calculated that an EU import ban on these products would reduce Russian exports of goods by 135 billion euros.
According to the International Intelligence Bureau, sanctions related to the impact on oil and gas exports will bring the greatest losses to the Russian budget. In 2021, profits from oil and gas exports accounted for 36%. In the Russian budget, and in previous years this share was often higher. According to analysts, the sanctions should also affect other lucrative export commodities, including precious and semi-precious metals, steel, iron and fertilizers.
He concluded that “research on the interdependence between the economies of Russia and the European Union shows that the Russian economy will suffer from such sanctions much more than Europe in the event of a possible retaliation.” (PAP)
Author: Magdalena Jarco
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