High-Priority Battlefield Items and Television Sets: How Did Sanctions Reduce Russians’ Access to Goods?

• In Event: Statistical Analysis of the Russian Economy with Permanent Sanctions I: Industrial Aspects

Abstract

We examine developments in Russian imports after the imposition of restrictions on exports to Russia by a coalition of sanctioning countries. As Russia has ceased to publish detailed statistics on foreign trade, we have to rely on export data from largest trading partners (mirror statistics). We are particularly interested on Russia’s trade diversion, i.e. to what extent Russian imports have shifted from sanctioning countries to other countries. We use monthly export data and focus on technology goods (HS codes 84 and 85) utilizing difference-in-difference approach. Our dataset covers exports to Russia at the HS6-level of disaggregation from 26 sanctioning and 14 non-sanctioning countries during 2018‒2023. We find that sanctioning countries’ overall exports to Russia have fallen drastically, and exports of sanctioned goods have fallen clearly more than average exports. On the other hand, non-sanctioning countries’ exports of sanctioned goods to Russia have risen more than their overall exports. Therefore, Russia has been able replace some of the goods it is unable to get from sanctioning countries, but not nearly all of them.

Author

• Iikka Korhonen, Bank of Finland (Finland)