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2022/02/11 / Erste Group Research

CEE Special | Links with Russia have been in decline

Escalation of tensions may potentially trigger another wave of economic sanctions against Russia with likely retaliation from Russia’s side. Trade between CEE and Russia has been on clear downward path since 2014-15, but dependence on Russian gas remains high.

Economic sanctions are being discussed as a plausible reaction to a potential attack on sovereign Ukraine, aiming to avoid the threat of open military confrontation. From the economic point of view, sanctions that hinder free trade make all sides worse-off, but should come at a lower price than military conflict.

Foreign trade and financial links with Russia have been falling for a long time, thus making CEE economies more resilient to any potential compression of exports to Russia due to sanctions. The domestic value added component of these exports ranged within 0.5-1.3% of GDP, according to the latest available data. Russia barely made it among the Top 10 export partners of CEE economies, apart from Slovenia and Poland, the latter being a relatively closed economy.

When it comes to natural gas dependence, the situation in CEE is rather diverse. Many countries are highly reliant on imports of gas, particularly Slovenia, Slovakia and Czechia, where their own indigenous production stands below 3% and thus the lion’s share of their energy needs is met by imports. In a striking difference, Romania imports only 19% of its natural gas needs and meets the remaining 81% with indigenous sources.

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General information

AuthorErste Group Research
Product nameCEE Economies Special Report
Topic in focusFX, Macro/ Fixed income
Economy in focusCEE
Currency in focus-
Sector in focus-


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