Ukraine drastically cuts imports from Russia in seven years

Ukraine has drastically reduced imports of goods from Russia, by 66.7% in seven years, to 6% of GDP, and also significantly reduced the share of assets of Russian companies in the country's economy.

Such conclusions are given in the Russian Economic Footprint in Ukraine research, conducted by the Centre for Economic Strategy (CES), which was published on September 14, 2020.

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"Trade between Ukraine and Russia has plunged. Ukraine's total imports from Russia fell from a peak of 18% of GDP in 2012 to 6% of GDP in early 2019," CES experts said.

The research that analyzes how the Russian economic footprint has changed over the recent decade says that since 2009, the share of assets and turnover of Russian companies in Ukraine has decreased from 3.6% to 2.1% and from 4.3% to 2.8%, respectively, of the total assets and turnover.

Russian investment in Ukraine

The CES notes that, according to official figures, reserves of Russian investment have remained relatively steady. However, the official figures significantly underestimate amounts of Russian investment in Ukraine.

"Our estimates show that, taking into account investments through offshores, Russian investment in Ukraine is at least twice as high as the officially reported figures," the study said.

Russian capital in the banking sector

Experts also observe a serious outflow of Russian capital in the banking sector. In 2009, there were 13 Russian banks in Ukraine (three among the ten largest ones), while only five Russian banks survived in 2019.

Russian capital in the energy sector

According to the study, one of the most notable achievements in the energy sector was Ukraine's termination of direct imports of Russian natural gas. However, the Russian presence remains significant and is still largely unchanged in other important areas such as metallurgy.

"In our opinion, to overcome the corrosive effects of Russian capital, Ukraine should ensure greater transparency for investment to better understand the scale of Russian investment in Ukraine. In addition, we believe that it is necessary to limit Russian investment in such important sectors as the media, energy etc., as well as generally restrict investment by Russian state-owned companies and companies associated with the Russian government, by eliminating gaps in sanctions and other problems," the CES experts said.

Developments in the past

• Imports of goods into Ukraine in the eight months of 2020 were estimated at US$33.3 billion, which was 12.4%, or US$4.7 billion down year-on-year.
• Exports of Ukrainian goods amounted to US$30.9 billion, 6.6% down, or US$2.2 billion less than in the same period of the same year.
• The largest countries that shipped goods to Ukraine were China with US$5.1 billion, Germany with US$3.2 billion, and Russia with US$2.9 billion. Exports to China totaled US$4.3 billion, those to Poland were estimated at US$2 billion, and to Russia at US$1.8 billion.