"Promising Export Items for Russia: Construction Machinery, Medical, and Consumer Goods"

Trade Association Publishes '2020 Russia Economic Outlook and Promising Export Items'

[Asia Economy Reporter Hwang Yoon-joo] As forecasts emerge that the Russian economy will recover this year, promising sectors for Korean companies to enter include construction machinery, medical, and consumer goods industries.

According to the "2020 Russia Economic Outlook and Export Promising Items" report released on the 30th by the Korea International Trade Association's International Trade and Commerce Research Institute (Director Shin Seung-kwan), the International Monetary Fund, World Bank, and others predict that the Russian economy will grow by 1.6-1.9% this year. This is a recovery compared to last year's sluggish growth rate of around 1.1%.

Russia plans to fully embark on national projects this year, investing $400 billion in 13 projects including infrastructure, healthcare, ecological environment, and digital economy through 2024. The Russian Central Bank, which cut its benchmark interest rate five times last year, indicated the possibility of further cuts in the first half of this year, signaling a focus on economic stimulus. However, economic sanctions imposed by the United States and the European Union (EU) since Russia's annexation of the Crimean Peninsula in 2014 continue to exert downward pressure on the economy.

The report stated, "Infrastructure development such as road network expansion, railways, and ports is a core project with $171.5 billion, accounting for 43% of the national project budget, allocated, and an increase in exports of construction heavy equipment is expected," adding, "Healthcare projects including modernization of medical facilities are also being promoted, which will further expand exports of medical devices and cooperation in medical services."

It continued, "Despite sluggish domestic demand in Russia, Korean companies ranked second in the passenger car market and second in the cosmetics import market," evaluating that "steady investment and localization strategies by the domestic automobile industry contributed to the automobile sector, while the popularity of Hallyu and excellent technology were key factors for cosmetics, with export prospects looking bright."

Kim Hyun-soo, senior researcher at the Korea International Trade Association, said, "The Russian economy is expected to recover compared to last year, so there are many business opportunities for Korean companies to consider entering," and added, "It is necessary to closely monitor government investment plans and consumer sentiment to devise appropriate strategies."

Meanwhile, Russia ranked as the 9th largest trading partner last year, accounting for 2.1% of South Korea's total trade, with a trade deficit of $6.77 billion, down from $10.18 billion the previous year. Last year, exports to Russia increased by 6.2% compared to the previous year, driven by strong performance in key items such as automobiles, machinery, and ships, which is a high figure considering that South Korea's overall exports decreased by 10.3% during the same period. On the other hand, imports from Russia decreased by 16.9% due to a decline in imports of mineral fuels such as crude oil and petroleum products, which account for more than 80% of imports from Russia.

This content was produced with the assistance of AI translation services.