. Last Updated: 07/27/2016

Soskovets: Foreign Trade Soars

COMBINED REPORTS


The volume of Russia's foreign trade and its trade surplus soared in 1995, marking the best export performance since reforms began in 1992, a top trade official said.


First Deputy Prime Minister Oleg Soskovets said Monday that preliminary estimates put overall exports last year at $63 billion, more than 31 percent over 1994, while imports amounted to $34.5 billion, a 22 percent increase on the previous year. The trade figures revealed a surplus of $28 billion, 43 percent higher than in 1994.


Soskovets attributed the rise to a boost in raw materials exports.


"The advantageous climate of the world market and the limited demand within Russia helped the growth of exports of natural gas, electrical energy, and metallurgical, chemical and timber production," he said.


Soskovets also said the ruble corridor introduced last July has helped stabilize the economy and boost foreign trade.


Exporters have complained that the soft pegging of the ruble against the dollar has hurt them, but the firm trade figures suggest exporters are faring better than anticipated.


"The export figures are a clear sign that exporters are not suffering but doing very well for themselves," said Jochen Wermuth, chief of the Economic Expert Group under the Macroeconomic Policy Department of the Finance Ministry. "In Russia we have such a boom in exports that even in spite of the real appreciation of the ruble we have a current account surplus."


Wermuth said that the net welfare gains from higher domestic raw material prices and higher raw material gains could be as high as 2 percent of gross domestic product.


He said the abolition of export quotas and the system of special exporters contributed to the rise in exports last year, adding that previously, 60 percent of exports were subject to quotas.


One analyst said the surplus offers Russia some valuable economic breathing room. "What that means is they can consume a lot more, invest a lot more over the next few years and not have a balance-of-payment crisis," said Peter Boone, an expert at the London School of Economics.


International bodies such as the World Trade Organization have urged Russia to reduce trade barriers and open markets to service industries like tourism and banking.Russia applied for membership to the 85-nation club in December 1994, just before the new body was launched to replace the GATT.


Soskovets warned that Russia will not be able to continue the trend for long because of increased spending on domestic production. He predicted raw material exports would shrink in 1996. ()