PMC Research Centre published a report Trade In Black Sea Countries. According to the document, looking at the exports and imports of goods of Black Sea countries, Russia has the highest trade volume in the region, while Georgia has the lowest. Throughout the analyzed period (2019-2022), all countries experienced a decline in trade in 2020, compared to the previous year (except for imports in Türkiye, which saw a YoY increase of 3.7% in 2020). In 2021, both exports and imports recovered and even surpassed pre-pandemic levels in all six countries. Subsequently, in 2022, exports and imports in goods continued to grow in Bulgaria, Georgia, Romania, and Türkiye. In Ukraine, suddenly faced with the war which started in February 2022, both exports and imports declined YoY by 35.2% and 20.4% respectively. Meanwhile, in Russia, imports declined YoY by 9.0%, though exports continued to grow and increased YoY by 19.8%. Notably, in the same year, Georgia experienced the highest growth compared to other countries in the region both in exports (YoY 36.0%) and imports (YoY 35.5%). The growth of trade in Georgia in 2022 is related to Russia waging its war on Ukraine, as this led to the redirection of transport routes away from the countries involved in the conflict, with Georgia emerging as an alternative transit route, increasing the demand for transport and logistics services in the country. This development is a notable example of just how interlinked the countries of the Black Sea region are, and how changes in one country can affect another.
Together with exports and imports, it is also important to analyze the balance of trade in goods, which refers to the difference between the value of a country’s exports and imports. The trade balance (as it is also known) is influenced by various factors, including the competitiveness of a country’s industries, domestic and international economic conditions, exchange rates, and government policies. It is a crucial indicator when assessing the economic health and competitiveness of a nation in the global market. Russia is the only country in the Black Sea region with a positive trade balance, also referred to as a trade surplus. In 2022, Russia’s trade surplus considerably increased (YoY 165.8%) and reached USD 315.6 billion (as previously explained, Russia’s exports increased while its imports decreased in 2022, which resulted in a substantial trade surplus). Generally, a trade surplus contributes positively to a country’s overall balance of payments, indicating that it is exporting more goods and services than it is importing. Such a surplus can lead to an accumulation of foreign reserves and strengthen the given country’s currency. However, the impact of a trade surplus can vary depending on the wider economic context, government policies, and the structure of the economy. In the case of Russia, its trade surplus in 2022 cannot be interpreted as a sign of economic strength, but rather as a temporary consequence of the war. Russia’s increase in exports over this period was related to increased revenues from fossil fuel exports resulting from higher prices, much of which were used to finance the war, rather than boosting the national economy. At the same time, falling Russian imports can be explained by a decline in the imports of sanctioned goods.
In the analyzed period, all of the other five countries in the region have experienced a trade deficit, whereby their exports have been lower than imports. A trade deficit implies that the country is buying more goods and services from other nations than it is selling, which could lead to a decrease in foreign reserves and may put pressure on the given country’s currency. However, the impact of a trade deficit depends on contextual factors and the effectiveness of policy management. Higher trade deficit stemming from increased imports of goods can also stimulate economic activity and contribute to overall economic growth, meeting domestic demand and supporting various industries. The highest trade deficit here is recorded in Türkiye, which also reports the second-highest volumes of imports and exports in the region. In 2022, the trade deficit in Türkiye amounted to USD 89.6 billion, which was about triple the size of the country’s trade deficit in 2021. Elsewhere, the trade deficit considerably deepened in Ukraine, reaching USD 14.6 billion in 2022.
In general, a sustained trade imbalance, whether it be a surplus or a deficit, can have implications for a country’s employment, economic growth, and overall stability. Thus, it is important to closely monitor the trade balance and implement measures to address such imbalances if they are deemed unsustainable or detrimental to the given economy.
