Car production forced to cut by more than 40%, labor supply dwindling due to conscription and exodus of young people
(Yosuke Tsuchida: Deputy Chief Researcher, Mitsubishi UFJ Research & Consulting)
Check the shortage of goods in Russia from production statistics
Russia invaded Ukraine on February 24th this year. Major countries, mainly in Europe and the United States, took the situation seriously and tightened economic and financial sanctions against Russia quickly before.
One of the symbolic sanctions was the removal of major Russian banks from the Association for International Interbank Telecommunications (SWIFT). The goal was to make Russian trade settlement difficult and slow down trade.
Russia has a trade surplus, most of which is accounted for by oil and gas exports. In other words, Russia is an economy that exports oil and gas and uses the proceeds to import other goods.
In fact, the Russian manufacturing industry did not have the ability to produce parts domestically and depended on imports, so when trying to make finished products in Russia, it was necessary to import many parts, intermediate goods and capital goods.
Russia imported such parts and intermediate goods mainly from Europe. If trade settlements with Europe become difficult, Russia will not be able to import the parts and intermediate goods necessary to produce finished products domestically. As a result, Russia will experience shortages of goods, which will weaken its economy and make the war more difficult to maintain. That was the aim of the European Union.
For Russia too, how to reduce the dependence of the manufacturing industry on the import of intermediate goods and capital goods has been a long-standing issue. From a security perspective, the efforts so far have not produced any notable results.
Russia has stopped publishing customs statistics since January this year, and it seems that one of the intentions was to hide the extent of the shortage so that it would not be perceived.
Meanwhile, Russia continues to publish manufacturing production statistics. Originally, the shortage of domestic products should be understood by the total supply (domestic production + imports), but in fact there is a big change in the production statistics of the manufacturing industry, which corresponds to domestic production. Based on this, I would like to use the production statistics of the manufacturing industry to gather the extent to which Russia suffers from a shortage of goods.