What are the characteristics of Russia's trade in goods and services?

Based on the total import and export volume of Russia's goods and services trade over the years, there are three main characteristics of Russia's international trade.

Firstly, the scale of trade fluctuates with economic growth. During Putin's first two terms, the total trade volume showed a rapid upward trend, with merchandise trade increasing from $149.9 billion to $763.5 billion and service trade increasing from $33.515 billion to $134.691 billion. However, in both 2009 and 2016, there were two significant and substantial declines in the total volume of merchandise and service trade, primarily due to the impact of two debt-related financial economic crises.

Secondly, from a horizontal comparison perspective, Russia's trade in goods is relatively large in scale, while its total trade in services is relatively small, and its international competitiveness is relatively weak. The annual trade volume in goods is 4-5 times that of trade in services. Furthermore, in Russia's trade in services, areas with competitive advantages are primarily distributed in low value-added industries such as construction, transportation, and retail, while its competitiveness in high value-added industries such as consulting, insurance, and finance is not strong.

Thirdly, in terms of import and export structure, there are also differences between trade in goods and trade in services. The export volume of trade in goods has always been greater than the import volume, resulting in a normalized foreign trade surplus; the import volume of trade in services has always been greater than the export volume, resulting in a normalized foreign trade deficit.

Russia has long experienced a trade surplus and maintained high foreign exchange reserves. In order to exchange the foreign exchange earned from exports, the central bank needs to print a large amount of local currency, which can easily lead to inflation. To curb inflation, Russia may adopt trade restrictions, such as increasing tariffs on food and energy exports and implementing export quotas.