Balance of payments remains stable in 1Q21

RUSSIA ECONOMICS - In Brief 09 Apr 2021 by Alexander Kudrin

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Russia’s balance of payments continued to evolve in 1Q21 and looked relatively healthy. The current account surplus reached $16.8bn, while the trade surplus was at $24.4 bn. Even though these numbers are lower than in 2Q20 ($23.9 bn and $33.1 bn), they looked solid. Note that Russia’s oil exports remained limited by the OPEC+ deal.Total exports reached $87.5bn versus $89.3bn in 1Q20 (down by a mere 2%). Revenues from exports of crude oil were down by over 21%, while exports of natural gas increased by 44.4% y-o-y. Exports of oil products also declined. Exports of crude and oil products accounted for $34.0 bn (which less than 39% of total exports). Meanwhile, non-energy exports grew in 1Q21 by 11.9% and reached $42.4 bn (48.5% of total).GKEM Analytica anticipated earlier that Russia’s imports would increase as consumer demand continued to shifts toward goods purchases. Restrained mobility of the population continued to suppress the services sector. In 1Q21, imports grew by 12.3% y-o-y and reached $63.1bn implying around $21.0 bn per month on average. It looks likely that in 2Q21, relatively the same volumes of monthly imports will persist, given that a moderate pace of economic recovery will limit m-o-m consumer demand growth. The y-o-y figures, however, will look strong. All in all, the balance of payments is expected to be stable in every quarter of 2021.Evgeny GavrilenkovAlexander Kudrin