BOFIT Viikkokatsaus / BOFIT Weekly Review 2020/11

Finnish goods exports to Russia increased last year by 10 % to 3.6 billion euros. Much of the export growth, however, reflected one-time supplies for construction of the Nord Stream 2 gas pipeline. Pipeline sections that were made in Russia and brought to Finland for coating were earlier recorded as part of Finland’s imports from Russia and last year correspondingly as Finnish exports to Russia.

Without the gas pipeline deliveries, Finnish exports to Russia grew only by about 1 % last year. Export trends vary considerably across branches. Exports of machinery & equipment, foodstuffs and forest industry products were up 3−6 %, while exports of chemical products and textiles experienced contractions. Finnish exports lagged market trends as Russia’s total goods imports grew last year by 8 % in euro terms supported by ruble appreciation.

Machinery & equipment remained the cornerstone of Finland’s goods exports to Russia, accounting for about a third of total exports. Chemical products represented about 20 % of exports to Russia. Other important goods categories included forest industry products and metals. The export share of foodstuffs has declined in recent years to around 3 % due to import restrictions imposed by Russia.

Finnish imports of Russian goods contracted by 3 % to 9 billion euros. Most of the contraction in imports came from the Nord Stream 2 pipeline project. When the pipeline project is excluded, the value of imports was unchanged from the previous year. About 70 % of Finnish imports from Russia in recent years have consisted of oil & gas. Other important imports include metals and chemical products, each of which accounted for about 10 % of imports.

Russia accounted for almost 6 % of Finnish goods exports last year, making it Finland’s fifth-most important export market. From sector perspective, Russia was an important export market in particular for the sectors of retail trade and manufacture of metal products. Russia also accounted for nearly 14 % of Finland’s goods imports, making it Finland’s second-largest import provider. In sector terms, Russia is important e.g. to Finland’s forest and metal industries as a source of raw materials.

The sectoral breakdown of Finnish imports from Russia is not complete (see table). Information in some branches is confidential due to small number of importing companies. For this reason, such items as energy imports are not fully reflected in the detailed breakdown of goods imports by branch, but rather included in the “other sectors” category.

Russia’s share of Finland’s goods exports and imports by branch in 2019

Source: Finnish Customs.

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