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CIREC Monthly News
Russian Chemical Trade Balance 2016
The Russian trade deficit in chemicals remains largely unchanged from 2015, although the amount spent on both exports and imports has fallen. Imports have fallen in the past three years due to budgetary constraints from the government and the devalued currency, which has prevented companies from buying as much as before, whilst at the same time exports have fallen at least in value due to the significant changes in oil and gas pricing.
Although there were slight declines in the value of import shipments for polymers and organic chemicals in the period January to November 2016, imports of pharmaceuticals actually showed an increase over the same period in 2015. However, the volumes still remain insufficient to meet the demand from hospitals and the domestic manufacturers have thus far not been able to replace much in the way of imports. Pharmaceutical production in Russia rose by around 8% in 2016, but this is not fast enough in terms of both quantity and quality to comply with the government’s ideas of import substitution. Much hope is placed by Russian government on the new US President this year to soften economic sanctions and improve economic relations, but ultimately the success of the Russian economy depends on internal reform. Efforts to push through liberalisation have to date have been easily thwarted by those with a vested interest in the current hybrid economic system, but until a political overhaul can be achieved the prospects for GDP growth will remain weak at best.
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