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Since the beginning of the conflict in Ukraine, exports from European Union (EU) countries to Russia have significantly decreased, with the January-February period seeing only half the amount of exports as in previous years. Finnish exports to Russia have declined even more than the EU average. In contrast, EU exports to Central Asian countries have been on the rise. The increase in Finnish exports to Central Asia is due to differences in statistical methodology, new entrants to the market, and potential circumvention of sanctions.

According to Eurostat, the EU's exports to Russia decreased by 38% or €34 billion from the previous year. The downward trend has continued, with EU exports to Russia in January-February 2023 being €7.2 billion, a 50% drop compared to the previous year.

On the other hand, EU exports to Kazakhstan, Kyrgyzstan, Georgia, Armenia, and Uzbekistan increased by 88%, or €9.6 billion, from the previous year. In 2022, EU exports to Kazakhstan increased by €4.9 billion, Uzbekistan by €1.5 billion, Georgia by €1.2 billion, Armenia by €1.1 billion, and Kyrgyzstan by €0.9 billion. In January-February 2023, EU exports to these Central Asian countries were €3.8 billion, which is 98% higher than the previous year. (See Annex Tables 1 and 2.)

The growth in EU exports to Central Asia in January-February 2023 was 26% higher in euros than the decline in exports to Russia.

"Although the EU's exports to Russia have halved, countries such as Latvia and Slovenia have increased their exports to Russia. Finnish exports to Russia have declined much more sharply than the EU average," said Statistics Director Olli-Pekka Penttilä.

Finnish exports to Russia have declined more than the EU average, and new companies registered in other EU countries have appeared in Finland's exports to Central Asia.

In January-February 2023, Finnish goods exports to Russia decreased by 78%. Russia's share of Finland's total exports was only 1.3%. In the same period last year, Russia's share was 5.5%.

In 2022, Finnish exports to Kazakhstan, Uzbekistan, Georgia, Armenia, and Kyrgyzstan increased by €0.2 billion, or 104%, from the previous year. In January-February 2023, Finnish exports to these Central Asian countries amounted to €0.1 billion, an increase of 260% from the previous year.

"The growth in Finnish exports to Central Asia is partly due to increased customs clearance by companies registered in other EU countries in Finland. New players have also entered the market. For example, of the companies that exported to Central Asia in January-February 2023, 257 were companies registered in other EU countries that had no exports to these countries from Finland in 2021. These companies accounted for roughly half of our exports to Central Asia," explained Olli-Pekka Penttilä.

In conclusion, Finland's exports to Russia have significantly decreased, and EU exports to Central Asia have increased. Finnish companies are facing increased competition from new entrants to the Central Asian market. However, the statistical methodology differences make it challenging to compare these numbers directly. Nevertheless, Finnish companies should explore opportunities in new markets to stay competitive.

HT

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