Russian macro: balance of payments to remain stable in 2024 as foreign trade flows evolve
The recent CBR statistics indicate that Russia’s current account remained steady in 2M24 amid relatively stable exports and imports. The trade surplus was wide enough to overlap the traditionally negative services and income balances. The spread between Brent and Urals reportedly narrowed in recent months. The Russian Central Bank and Customs Committee no longer provides detailed information on Russia’s exports, i.e., no breakdown by trade group and no information on the price and volume of various products is available. Nonetheless, it looks as though sufficiently high energy prices were behind Russia’s robust foreign trade data in 2M24. The current account surplus reached $9.7 bln in this period. In 2023, it stood at $50.0 bln, implying that the 2M24 trends didn’t look very different from the average figures for the last year.
Recent developments illustrate that Russia stopped saving as much as in the past, and capital outflow has decreased in recent years. The government and the corporate sector increased investment in the country’s economy. Previously accumulated savings appeared in a different dimension and were lost. Russia had to write off its losses and start the new round of the game—mainly with other players.
The current geopolitical realities stipulate that this new round of the game assumes the need to reduce trade with “unfriendly” jurisdictions further. This kind of game evolution implies not only the re-direction of exports and imports from and to Russia (which is gradually happening) but also the use of different payment means in favor of alternative currencies, as started to take place in 2022-2023. All in all, the spontaneous diversification of foreign trade flows and related payments helped the Russian economy to withstand pressure from the West and to grow in 2023.
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