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  • Promising Export Items to Russia, Construction Machinery, Medical and Consumer Goods
    2020-01-29 hit 574

    Promising Export Items to Russia, Construction Machinery, Medical and Consumer Goods

     

    - KITA analyzed Russia’s economic outlook and promising export items Korea’s 9th largest trading country -


     

    With the prospect that the Russia’s economy will recover this year, the construction machinery, medical and consumer goods industries were suggested as promising areas for Korean companies to expand. 

     

    According to a report titled, 2020 Russia's Economic Outlook and Promising Export Items” issued by the Institute for International Trade (President, Shin Seung-kwan) of the Korea International Trade Association on January 30th,  the International Monetary Fund and the World Bank forecast that the Russian economy will grow 1.6 to 1.9 percent this year. This is a recovery from last year's growth rate of around 1.1 percent.

     

    Russia is planning to begin full-fledged national projects this year and invest 400 billion dollars in 13 projects, including infrastructure, healthcare, ecology and the digital economy until 2024. Russia's central bank, which had cut its benchmark interest rate five times last year, has indicated further cuts in the first half of this year, suggesting that it will focus on stimulating the economy. However, economic sanctions from the United States and the European Union (EU) imposed after Russia's annexation of Crimea in 2014 are placing downward pressure on the economy. 

     

    The report said, “Expansion of road network, railway, port, etc. is a core project with 171.7 billion dollars, which is 43 percent of the national project budget, and the export of heavy construction equipment is expected to increase, and added, Since the country is promoting healthcare businesses, such as modernizing medical facilities, and medical device exports and medical service cooperation will be further expanded.

     

    The report also stated, In spite of Russia’s sluggish domestic demand, Korean companies ranked second in the passenger car market as well as in the cosmetics import market, and added, "In automotive industry, Korean companies’ steady investment and localization strategies have worked while the popularity of Korean Wave and excellent technology have played big part in the success of cosmetics. The export prospects of the two industries are promising.

     

    Kim Hyun-soo, a senior researcher at the Korea International Trade Association, said, “As the Russia’s economy is expected to recover this year compared to last year, there are many projects that are worth for Korean companies to consider entry. He also mentioned, "They need to pay close attention to the government’s investment plans and consumer sentiment, and develop appropriate strategies." he said.

     

    On the other hand, Russia was the 9th largest trading partner of Korea, accounting for 2.1 percent of Korea's total trade last year. The trade deficit was 6.77 billion dollars, down from 1.98 billion dollars year-on-year. Last year, Korea’s exports to Russia increased by 6.2 percent, which was a significant figure considering that Korea's overall exports decreased by 10.3 percent over the same period, compared to the previous year as major products such as automobiles, machinery, and ships showed good performance. In contrast, imports from Russia dropped 16.9 percent as imports of mineral fuels such as crude oil and petroleum products that take up more than 80 percent of Korea’s total imports from Russia declined.


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