#1Pskov slide package for a foreign investor Pskov чести своей не отдам никому Elias Kallio December 2019 vali for quigation Wallingrain.com TURUN YLIOPISTO [1]] pan european institute#21. General information 2. Regional economy Contents 3 10 3. Prosperity and consumption 20 4. External economic relations 25 5. Additional information 29 The information in this document is compiled and edited from a variety of sources. The Pan- European Institute assumes no responsibility for the completeness or accuracy of the information. [1] TURUN YLIOPISTO pan european institute not valid for Pskov Wallingrain.com 2#31. General information a) Basic facts Area: 55 300 km² Largest towns: (population 2019) Pskov Velikiye Luki Ostrov Main industrial output: 210 116 90 549 20 482 Meat, milk, linens, clothes, construction materials, motors, cables, high-voltage machines and insulators Natural resources: Forests, clay, molding sand, gravel, peat, lime, water TURUN YLIOPISTO [!]] pan european institute Pskov not valid for hauigation llingrain.com Source: Pskovstat 2019 3#41. General information b) Administrative division Novgorodskaya oblast District Population (2019) District Population (2019) Bezhanitsy 9 834 Pechory Dedovichi 11 697 Plyussa 19 376 7 266 Dno 10 971 Porhov 16 947 The Chudskoe Lake Gdov Krasnogorodsk Kunya 11976 Pskov 41 093 Gdov Leningradskaya oblast Pskovskaya oblast 6 692 Pskov (city) 210 116 8779 Pushkinskiye Gory 7 837 Pskov Loknya Nevel Novorzhev 7 757 Pustoshka 7 899 23 308 Pytalovo 10 682 7 849 Sebezh 18 833 Novosokolniki Opochka Ostrov Palkino 12 580 Strugi Krasnye 10 129 15 990 Usvyaty 4 932 28 691 Velikie Luki 7317 Velikie Luki (city) 20 551 90 549 Latvia Novorzhev Pytalovo Pustoshka Velikić Luki TURUN YLIOPISTO [1] pan european institute Belarus Nevel Tverskaya oblast Source: Pskovstat 2019 4#51. General information c) Geographical facts Borders with: Latvia Estonia Belarus 214 km 270 km 305 km Distance from Pskov to some capitals: Riga 270 km Tallinn 350 km Minsk 480 km Moscow 689 km Helsinki 700 km Kiev 780 km Warsaw 800 km Stockholm 860 km Berlin 1 200 km Brussels 1 740 km TURUN YLIOPISTO Pi pan european institute Pskov allingrain.com 5#61. General information d) Transport infrastructure Motorways Moscow - Riga St. Petersburg - Kiev - Odessa St. Petersburg - Vilnius St. Petersburg - Riga Railway routes Moscow - Riga St. Petersburg - Odessa St. Petersburg - Vilnius - Kaliningrad St. Petersburg - Riga St. Petersburg - Lviv 2005 2010 2017 Length of roads (km) 10 891 14 552 23 466 Length of railways (km) 1 092 1 092 1 089 Cargo traffic on railways (tons) 2 609 3 832 3 799 Cargo traffic on roads (tons) 792 1 455 1 265 Passenger traffic on railways (million people) 4.7 2.3 0.7 119.6 69.5 50.6 Passenger traffic on roads (million people) TURUN YLIOPISTO [!]]] pan european institute Pskov lingrain.com Source: Pskovstat 2019#71. General information e) Population Structure of population in 2019 70+ 70,155 2008 2013 2018 65-69 42,835 Population (thousand) 700 662 637 60-64 49,697 Population change (%) -7.7 -5.4 -3.8 55-59 49,531 50-54 40,373 Share of urban population in total 69.2 70.3 70.9 45-49 41,273 population size (%) 40-44 43,026 Economically active population 35-39 45,298 366.9 350.9 319.0 (thousand) 30-34 48,046 25-29 39,926 Economically active population (%) 52.5 53.1 50.1 20-24 31,577 Number of unemployed (thousand) 23.8 24.4 18.2 15-19 28,966 Unemployment, ILO definition (%) 6.5 7.0 |5.7 10-14 31,272 5-9 34,506 0-4 33,170 . Population is decreasing and getting older, as a consequence the dependency ratio is getting worse. TURUN YLIOPISTO Pai pan european institute 0 10000 20000 30000 40000 50000 60000 70000 80000 Source: Rosstat 2019, Pskovstat 2019 7#82500 2000 1. General information f) Population Migration balance 1500 1339 1223 1000 827 716 500 177 0 2016 -500 -1000 -1162 -1500 -2000 -2500 TURUN YLIOPISTO -548 2017 -1375 -1859 2018 -1161 -597 -698 ■Total migration Inside Russia Foreign countries (total) CIS-countries @] pan european institute Most of the migration movement takes place inside Russia or inside post-Soviet territory. Source: Pskovstat 2019 8#91. General information g) The unemployment rate % (ILO definition) Unemployment in the Pskov region is a larger problem than in Russia on average. Compared to the average of the North-West Federal district, where Pskov is located, the situation is even worse. One of the reasons why people are moving from the Pskov region is employment and higher living standards elsewhere, for example in St. Petersburg. 8% 7.0% 6.9% 7% 6.7% 6.5% 6.5% . 6% 5.7% 5.5% 5.6% 5.5% 5.2% 5.2% 4.8% 5% 4.7% 4.6% 4% 4.3% 4.2% 4.1% 3.9% 3% 2% 1% 0% 2015 -North-West Federal district 2016 2017 -Russia 2018 2013 TURUN YLIOPISTO 2014 Pskov [=]]\ pan european institute Source: Rosstat 2019 9#102. Regional economy a) Regional GDP per capita 10,000 € 600,000 P 2017 65.94 8,904 € 9,000 € 8,731 € 7,952 € 8,000 € 500,000 P 7,738 € Average annual exchange rate EUR to RUB 2016 74.14 2015 68.07 7,000 € 2014 50.95 6,598 € 6,367 € 400,000 P 2013 42.34 6,000 € 2012 39.93 5,000 € 300,000 P 4,055 € 4,110 € 4,000 € 3,717 € Share of the North-West Federal District 3,596 € 3,063 € in 2017 3,047 € 3,000 € 200,000 P Pskov region 1.85% 2,000 € 100,000 P 1,000 € 0 € 2012 Pskov EUR TURUN YLIOPISTO ОР 2013 2014 Russia average EUR 2015 2016 - Pskov RUB 2017 Russia average RUB Pai pan european institute Source: Rosstat, Statista 2019 North-West Federal District 98.15% 10#11%-change from previous year 2. Regional economy b) Development of regional GDP per capita in current prices 25% 20% 15% 10% 5% 2.0% 1.3% 0% -5% -10% -15% -20% • 21.5% 18.0% 10.8% 10.1% 8.8% 7.5% 8.1% 8.4% 7.5% 8.1% 5.1% 5.0% 2013 -0.5% 2014 2015 2016 -3.5% -9.6% -10.7% Pskov EUR Russia average EUR -17.6% 17.0% Pskov RUB Russia average RUB 2017 Because of Ruble's devaluation the GDP development in RUB and EUR is radically different. The GDP measured in EUR describes the development of real GDP and purchasing power more adequately. ||]]] TURUN YLIOPISTO pan european institute Source: Rosstat, Statista 2019 11#122. Regional economy c) Structure of regional GDP by economic activity in 2017 Construction 7% Others 29% Manufacturing industries 17% Retail trade and wholesale 16% Transport and communications 10% Government, military and social security 10% Agriculture, hunting and fishing 11% TURUN YLIOPISTO [1]] pan european institute Source: Pskovstat 2019 12#132. Regional economy d) Distribution of companies by ownership and economic activity 2010 2015 2016 2017 2018 Distribution of companies by economic activity in 2018 State-owned 783 625 616 602 556 Municipal-owned 1 295 888 853 823 811 Others 31% Wholesale and retail trade 28% Privately-owned 11 860 12 977 12 621 12 696 12 074 Religious and public 895 839 837 839 766 organizations Others Total 1 151 1 053 869 871 811 15 984 16 448 15 796 15 831 15 017 Real estate • The share of private companies has grown 7% substantially in the last 10 years. Transport and storage TURUN YLIOPISTO [!]] pan european institute 7% Agriculture, hunting and fishing 8% Manufacturing industries 9% Source: Pskovstat 2019 13 Construction 11%#142. Regional economy e) Largest* companies of the Pskov region Food industry: · • • Pskovpischeprom ZAO Pskovskij molochnij kombinat ZAO Pskovskij hladokombinat OAO Fuel, chemical and petrochemical industry: • ERT OOO Nordiks-Balt 000 Machine-building and Metal processing industry: • • Avtospezoborudovanie OAO Autoelektroarmatura OAO • Pskovskij Hlebokombinat OAO Electricity industry: • Zavod Tochlit ZAO • Torgovaya firma vodniyi mir OOO • ZETO ZAO • Magnitnoye Mashinostroyenie 000 Pskovskij kabelnij zavod OAO • OKZ Holding O00 Ekvajer 000 • Poliplast 000 Wood industry: • Alta ZAO • • Bytovka-Pskov 000 Domlessteroj Ooo Power industry: • PAO MRSK Severo-Zapada's subsidiary Pskovenergo Light and textile industry: • • Pskov-Polimer OOO Pskovskaya Shvejnaya fabrika slavyanka ZAO • • Pskovgeokabel 000 Pskovskaya lodochnaya verf ZAO TURUN YLIOPISTO ||]] Information subject to changes Source: Administration of Pskov 2019 14 *According to the Administration of the Pskov region. pan european institute#15%-growth from previous year 2. Regional economy f) Growth of socio-economic indicators in 2017 Retail trade turnover Real income Nominal income Production of processing industries Investment in fixed capital 1.7% 4.1% 2.9% 7.1% 6.6% 5.3% 4.7% 8.9% 6.6% 4.3% 5.3% 2.5% TURUN YLIOPISTO 0% Pskov 5% Pi pan european institute 9.2% 8.7% 10% 28.3% 15% 20% 25% 30% Russia North-West Federal district Source: Fedstat, Rosstat 2019 15#162. Regional economy g) Development of investment in fixed capital (million EUR) Average annual exchange rate 500 1.9% 450 1.8% 400 350 300 250 475 200 406 150 100 50 1.5% 263 216 1.1% 2015 2016 0 2013 TURUN YLIOPISTO 2014 Pskov |]]] pan european institute 2.0% EUR to RUB 1.8% 2018 74.04 1.6% 1.4% 1.3% 1.2% 1.1% 1.0% 0.8% 312 0.6% 264 0.4% ° %-change from previous year 2017 65.94 2016 74.14 2015 68.07 2014 50.95 2013 42.34 0.2% 0.0% 2018 2017 North-West Federal district Source: Fedstat, Statista 2019 16#172. Regional economy h) Development of retail trade (million EUR) Average annual exchange rate EUR to RUB 3000 2500 2000 2,250 2,085 2,027 1,493 1500 1,437 1,342 1000 500 2,382 2,299 2018 74.04 2017 65.94 1,617 2016 74.14 1,515 2015 68.07 2010 40.26 0 2010 TURUN YLIOPISTO 2015 Pskov 1-1 pan european institute 2016 2017 Kaliningrad The population of Pskov region in 2018 was about 637 000 and Kaliningrad region about 1 000 000. 2018 Source: Fedstat, Statista 2019 17#18%-change from previous year 7% 6% 5% ão do do do do do do do 4% 3% 2% 1% 2. Regional economy i) Development of industrial production (% from previous year) 2.6% Industrial production 6.5% 4.2 % 1.4 % 0% 2015 2016 2017 2018 TURUN YLIOPISTO P=1 pan european institute 2015 2016 2017 2018 Industrial production Mining 2.6 4.2 6.5 1.4 11.2 5.5 9.1 12.4 Manufacturing industries 3.8 5.3 4.3 2.3 Electricity, gas and steam -17.3 -14.1 22.2 -25.8 Water and waste disposal -1.8 6.6 42.7 -0.2 Source: Pskovstat 2019 18#192. Regional economy j) Investment potential ranking of the Pskov region among 85* Russian regions TURUN YLIOPISTO Ranking of investment potential Labor potential Consumption potential Production potential Financial potential Institutional potential Innovation potential Infrastructure potential Natural resource potential Tourism potential Ranking of investment risk P1 I pan european institute 2017 2018 67 68 68 71 70 70 71 72 71 71 63 57 71 73 20 17 76 76 33 33 59 64 *The international community does not recognize Crimea and the City of Sevastopol as a part of Russia. Source: RAEX 2019 19#203. Prosperity and consumption a) Average income and minimum subsistence level, €/month 800 € 712 € 700 € 600 € 640 € 594 € 587 € Average annual exchange rate EUR to RUB 500 € 496 € 500 € 467 € 2018 74.04 410 € 400 € 2017 65.94 354 € 363 € 315 € 300 € 2016 74.14 300 € 2015 68.07 200 € 2014 50.95 170 € 161 € 100 € 151 € 160 € 142 € 143 € 2013 42.34 - € 2013 2015 Pskov 2014 Russia Minimum subsistence level Pskov The substantially lower wages than the Russian average are partly the reason for people to move to other regions. 2016 2017 2018 TURUN YLIOPISTO [=]]] I pan european institute Source: Fedstat, Statista, Rosstat 2019 20#213. Prosperity and consumption b) Growth of the real money income % 15% 10% 5% 4.8% 5.0% 0% 2013 -5% -10% 1.2% 0.6% 0.8% 2014 2015 -1.8% -15% TURUN YLIOPISTO Russia 11 pan european institute -8.3% -9.0% 4.1% 2.9% 2.9% 1.3% 1.7% 0.8% 2016 2017 -12.2% Nort-West Federal district Pskov 8.5% 8.9% 10.3% 2018 Source: Fedstat 2019 21#223. Prosperity and consumption c) Cost of the basket containing minimum set of food products (€/month) 80 € 73 € 70 € 68 € 70 € 66 € 66 € 61 € 60 € 50 € 40 € 30 € 20 € 10 € - € 2013 2014 Pskov 62 € 60 € 54 € 2015 Russia 68 € 64 € 58 € 58 € 56 € 50 € 62 € 57 € Average annual exchange rate 53 € EUR to RUB 2018 74.04 2017 65.94 2016 74.14 2015 68.07 2014 50.95 2013 42.34 2016 Nort-West Federal district 2017 2018 • The minimum set of food is a standard, defined by the Federal State Statistic Service. TURUN YLIOPISTO [!]] pan european institute Source: Fedstat, Statista 2019 22#23%-change from previous year 16% 14% 12% 10% 8% 6% 4% 2% 3. Prosperity and consumption d) Consumer price index 7.2% 6.5% 6.6% 12.5% 12.0% 11.4% 14.2% 13.0% 13.1% 0% 2013 2014 ■ Pskov 2015 Russia TURUN YLIOPISTO |]] pan european institute 5.4% 5.1% 5.1% 2016 3.1% 2.4% 2.6% North-West Federal district 2017 4.9% 4.3% 4.1% 2018 Source: Fedstat 2019 23#24450 3. Prosperity and consumption e) Other indicators Number of cars per 1 000 persons 35 Average apartment size per person 30 29 30 393 400 382 376 350 305 25 300 289 294 250 200 Square meters 20 20 15 150 10 100 50 0 5 24 4 30 25 0 2016 2017 2015 2016 2017 Russia ■Pskov Russia 2015 Pskov TURUN YLIOPISTO Tai pan european institute Source: Rosstat, Pskovstat 2019 24 25#25600 4. External economic relations a) Development of foreign trade of goods (million USD) 500 530 400 300 200 208 100 0 159 56 56 123 70 70 373 59 214 157 360 2015 ■Total export TURUN YLIOPISTO 2016 Export to CIS-countries Pa]]] pan european institute 2017 ■Total import 62 62 309 283 203 2018 Import to CIS-countries 88 48 Source: Pskovstat 2019 25#264. External economic relations b) Foreign trade export in 2018 Hong Kong 2% Finland 2% Kazakhstan 3% Latvia 7% Estonia 8% Others 13% Export by country TURUN YLIOPISTO [1]]] pan european institute Animal products 7% Machinery, equipment and vehicles 10% Belarus 66% Wood and wood products 15% Total export is 283 million USD. Export structure Others 13% Metals 55% Source: Rustat based on data from Russian customs 2019 26#274. External economic relations c) Foreign trade import in 2018 Import by country Import structure Others 38% Belarus 15% Austria 5% Hungary 6% Latvia 11% TURUN YLIOPISTO Pi pan european institute Others 32% Germany 13% China 12% Books, paper and paperboard 7% Plastics and rubber 8% Metals 8% • Total import is 309 million USD. Machinery, equipment and vehicles 29% Food, beverages and tobacco 16% Source: Rustat based on data from Russian customs 2019 27#284. External economic relations 350000 d) Visitors in hotels and other accommodation services 300000 250000 200000 16,572 150000 100000 168,755 50000 26,961 30,367 25,841 266,163 249,837 252,537 2016 2017 2018 Russian citizens ■Foreign Citizens 0 TURUN YLIOPISTO 2015 I Pai pan european institute 28#295. Additional information Chamber of Commerce and Industry of the Pskov region https://pskov.tpprf.ru/en/ Investment opportunities of Pskov region http://invest.pskov.ru/en/about-region North-West Federal District of the Russian Federation http://szfo.gov.ru/district/PSK/ Pskov region official site http://www.pskov.ru/ Pskov regional tourist site http://www.tourism.pskov.ru/ TURUN YLIOPISTO [1]] pan european institute Information subject to changes 29 29