Russian Imports Decline 41% in January on Sanctions, Weaker Ruble
By Dow Jones Business News, February 04, 2015, 12:20:00 PM EDT
By Alexander Kolyandr
MOSCOW--A sharp weakening of the ruble and economic decline saw Russian imports decline by 41% in January from a year earlier, according to figures from the country's Customs Service published Wednesday.
Imports to Russia from countries excluding former Soviet Republics fell to $9.9 billion from $16.7 billion in January 2014. The sharp decline is another visible sign of Russia's economic troubles amid Western sanctions over Moscow's policy in Ukraine and a decline of more than 50% in the value of the ruble against the dollar amid lower
oil prices.
Imports to Russia were on the rise for years, reflecting buoyant consumer demand and a strong currency supported by high oil prices, Moscow's main source of hard currency.
However, the Russian economy started to slow in 2014 as investment dried up and Western sanctions deprived companies of cheap borrowed money from abroad. In response to the sanctions, Moscow introduced a ban on the import of food from the West. While figures for the whole of 2014 are yet to be published, in the first 11 months of 2014 imports to Russia declined by 7%.
Russia's economic troubles increased at the end of 2014, as oil prices started to decline sharply.
The ruble, which has been under pressure for the whole of 2014, sustained a sharp decline in December and January, when its weakening was the sharpest since the 1998 economic crisis.
As companies started to cut their investment programs, the import of heavy machinery, by far the largest part of all imports, fell by 45% in January. Food imports declined by 42%, and imports of consumer goods were down by 39%.
