German exports to its nearby CIS countries are seeing a substantial surge this year, according to recent statistics. Exports to these states, excluding Russia, climbed an impressive 30.0% year-on-year, reaching 7.3 billion euros from January to October, as reported by the Federal Statistical Office. On the contrary, exports to Russia experienced a significant drop of 39.1% during the same period, settling at 7.6 billion euros.
Experts propose that many of these goods make their way to Russia indirectly through the CIS nations, despite the imposed Western sanctions due to Russia's involvement in the conflict with Ukraine.
Kazakhstan led the list of major German export destinations in the CIS states, a notable improvement from its 55th place ranking in the previous period. The country saw an impressive 32.0% increase in exports, totaling 2.8 billion euros. Belarus also witnessed an increase in exports, up by 40.8% to 1.5 billion euros, while Uzbekistan experienced a slight decline, with exports decreasing by 4.2% to 846 million euros. Business in Kyrgyzstan thrived, with exports skyrocketing by a staggering 180.1% to 591 million euros.
Motor vehicles and vehicle parts were the primary exports to the CIS states, experiencing a substantial increase of 65.0% to 2.1 billion euros. Other significant export goods encompassed machinery (up 38.7% to 1.6 billion euros) and chemical products (20.9% increase to 640 million euros).
Further Reading:
Despite the decline in exports to Russia, Germany's neighboring CIS countries continue to present significant opportunities for businesses. Kazakhstan, in particular, has emerged as a notable market, attracting increased attention due to its strategic positioning and favorable investment incentives.
Enrichment Data:
The surge in German exports to its CIS neighbors, such as Kazakhstan, can be attributed to several factors:
- Alternative Trade Routes: Sanctions against Russia have led to the creation of new trade routes and strategies, with countries like Kazakhstan acting as conduits for European goods to reach Russia indirectly, mitigating the impact of sanctions on Russia's economy[2][3].
- Energy Security: CIS countries, including Kazakhstan, aim to diversify their energy sources to ensure energy security, which includes increasing trade with countries like Germany to reduce dependence on Russian energy[2][3].
- Existing Trade Ties and Market Vacuum: The CIS countries have long-standing trade ties with Europe. With the risks of cutting ties due to the Ukraine conflict, they capitalize on the market vacuum created by countries that have suspended trade with Russia, ensuring they maintain a competitive position[2].
- Economic Incentives: Kazakhstan offers various investment incentives, such as custom duty and VAT exemptions, state in-kind grants, tax breaks, and investment subsidies, which entice foreign investors and businesses, like German firms, to invest in the country[5].
- Geopolitical Dynamics: The uncertain geopolitical situation and depth of Western sanctions on Russia pose challenges. In response, countries like Kazakhstan are positioning themselves to maintain economic ties with both Europe and Russia, ensuring their economic stability[2][3].
These factors contribute to the growth of German exports to Kazakhstan and other CIS countries, despite the decline in exports to Russia.
