Spoiler: Statistics Sweden reported in a news brief that net exports explained a reduction in GDP compared to a previous period. This is wrong. Later in the same brief they defined GDP as the sum of goods and services domestically produced during a period of time. This is correct.
This misunderstanding is often repeated in the media. It is probably due to a sloppy reading of the National Accounts definition of GDP. This states that GDP = Private Consumption + Government expenditures + Investments + Exports – Imports. But imports are deducted from GDP because Consumption, Investments, and Exports include imported goods and services. Imports and the imported parts of the other components cancel out.
Spoiler: putin is creating a famine in the countries dependent on grain imports from Ukraine. He’s trying to blame sanctions on russia. That is a lie. There are no sanctions on russian exports of grain, other agricultural products or fertilizers.The food crisis is caused by putin, and only by putin. He blocks Ukrainain ports, he steals Ukrainian grain, he destroys Ukrainian agricultural equipment, and he bombs and mines Ukrainian agricultural fields. He bombs grain silos in Mykolaiv.
Spoiler: The export sanctions are working even though the Kremlin says the opposite. The fact that increasing oil prices have increased russia’s current account is not a sign of success. russia’s imports have decreased drastically due to export sanctions on products that russia needs to kill civilian Ukrainians. The plunging imports are also due to non-sanctioning countries’ hesitation to export to russia because of fear of being on the wrong side of history.
But more export sanctions are necessary. Most export sanctions refer to high-technology products that can be used to kill Ukrainians. That is not enough. Not only chips and electronic components are used in the weapons and weapons systems that putin uses to kill Ukrainians. Also plastics, rubber, metals, textiles and other types of materials are needed.
Including also such products in the export sanctions will make it even more difficult for putin to fight his genocidal war. And secondary sanctions should be imposed to prevent other countries to use sanctioned countries’ products in exports
Imposing secondary sanctions are important because weapons are made by different industries located all over the world. The production in global value chains makes putin’s industries more sensitive for sanctions. By excluding products from global value chains reaching russia, russian industries’ abilities to produce more weapons will be severely limited.
Spoiler: Swedish industries recovered from the Corona crisis. In December 2022, two thirds of the industries had higher levels of production than 12 months earlier. At this point in time, the increase in energy prices had lasted for a few months. The impact on firms and industries varies depending on energy intensity and duration of contracts between firms and their energy suppliers.
The Diffusion Index contains data for all industries until December 2021. There is data for thirty-four industries until February 2022. The developments of those industries suggest that the Index continues to grow until February.
The psychopath in Kremlin’s war against Ukraine is not yet visible in the data. How this will affect Swedish industries remain to be seen. It has resulted in disrupted supply chains, and higher energy costs increasing the prices of other inputs and the general inflation rate. Whether this supply chock will translate into a recession remains to be seen.