Three questions on Russia and Eastern Europe

news - 11 JUN 2017

Three questions about development in Russia and Eastern Europe for the EKN Country Analyst, Johan Dahl.

What are the distinct economic and political trends?

“After two years of recession in Russia, there is a sign of a weak recovery of GDP growth. Increased economic activities in Russia are important to many of its surrounding countries, mainly in Central Asia that depends on the money sent home by guest workers in Russia.

 – Politically, it’s in the balance. Sanctions will likely remain for a while, and the relationship between the USA and Russia is more frosty than it has been for a while. A presidential election will take place in Russia in 2018, and no great changes to the political scene are expected”.

How interested are Swedish exporters?

“Swedish exports to the region increased somewhat in 2016 compared to the previous year. Exports to Russia, which dominates the region, were unchanged in 2016. As for the EKN, the issue of guarantees in estimated SEK for the entire region dropped substantially in 2016 – in Russia most of all. On the other hand, the rate of business increased again and almost reached the peak of the past ten years of the 60 transactions per year guaranteed by EKN”.

What must businesses think about when they export to Russia?

“As sanctions remain – against people, businesses and certain products – it is important to check the other party in Russia and export goods against the sanctions. Since 2014, EKN has provided a specific exporter’s appendix that must be completed so EKN will guarantee that no sanctions are being broken, and can therefore participate and support Swedish exports”.

 Risk development in Eastern Europe in four points

  • Relations between Russia and the USA remain in the balance
  • No end to the conflict in eastern Ukraine
  • Investments – weak increase in confidence for Russia, in line with growing oil prices and increased growth
  • Weak Russian economy continues to have a negative effect on neighbouring countries

EKN’s outstanding guarantees for exports to the region amount to approximately SEK 13 billion.