Russian macro: GDP growth, external balance stable as settlements in national currencies gain importance
Rosstat recently provided additional color to its 3Q24 GDP growth flash estimate (3.1% y-o-y) published earlier, and the sectoral GDP production growth rates are now available. The 9M24 GDP increase was more impressive (4.1% y-o-y) than in 3Q24 alone. Rosstat also revealed that the seasonally adjusted 3Q24 GDP increased by about 0.7% Q-o-Q, i.e., a bit faster than in 2Q24 (0.5% Q-o-Q) but slower than in 1Q24 (1.1% Q-o-Q). Generally, these numbers are quite in line with our 2024 annual GDP growth forecast (3.8–3.9%).
The end-use GDP statistics will be published later and will be of great interest as any information on foreign trade (including net export trends in SNA definition) may provide certain hints on its future dynamics. Given that Rosstat and the CBR stopped publishing detailed statistics on foreign trade since 2022, any fresh information associated with foreign trade and the balance of payments, even if it could only partially offset the information gap, looks essential.
GDP growth was backed by the relatively stable foreign trade despite permanently mounting sanctions pressure. The CBR’s first estimate of the 11M24 balance of payments suggested the current account surplus amounting to $57.4 bln. The trade balance widened to $118.6 bln. Exports reached $386.0 bln, while imports climbed to $267.5. In November alone, exports accounted for $32.2 bln and were lower than in the previous months but in line with our 2024 yearly outlook ($418 bln this year). We expect exports to grow moderately next year.
Western restrictions aim to target not only the foreign trade goods flow but also Russia’s international financial transactions. In such an environment, Russian exporters attempted to rearrange foreign trade relations by developing relations with non-Western trade partners. Despite incomplete foreign trade statistics, it is clear from various other publications that Russia’s foreign trade with Europe shrank while that with Asian and African countries increased. The share of “unfriendly currencies” in cross-border transactions dramatically fell, while national currencies gained importance. Statistical data illustrate that the Russian economy appeared quite adaptable to permanently mounting external pressure. It looks as though the evolution of the payment system for cross-border transactions will continue in 2025 and beyond.
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