Balance of payments holds steady in 2Q24

RUSSIA ECONOMICS - In Brief 11 Jul 2024 by Evgeny Gavrilenkov

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The CBR reported that the current account surplus amounted to $18.0 bln in 2Q24, which was not as much as in 1Q24 but still enough to secure a $40.6 bln current account surplus in 1H24. The trade balance reached $67.8 bln and was almost the same in both quarters ($33.8 bln and $34.0 bln). Monthly exports and imports remained almost unchanged, indicating that the economy continued to grow steadily. The oil price remained high enough to secure a stable flow of export earnings. In recent days, Brent prices hovered close to $85/bbl, and the Urals price was slightly below $80/bbl, i.e., almost on par with WTI. Meanwhile, the 1H23 current account was narrower ($23.3 bln)—not least due to a wider deficit of the income balance ($17.0 bln), while in 1H24, the income balance deficit narrowed to $10.4 bln in the aftermath of the exodus of the foreign investors from the country. Therefore, the ruble remained under relatively more powerful appreciation pressure than previously, i.e., it is not only adjusting to new terms of trade, implying stronger links to CNY and other aspects of the ongoing de-dollarization, but also due to the changing structure of the current account. Currently, it looks as though the balance of payments will remain equally stable through the remainder of 2024, as well.