The current account widens in 4Q20 as exports grow

RUSSIA ECONOMICS - In Brief 19 Jan 2021 by Alexander Kudrin
The Central bank released its first estimate of the 2020 balance of payments. The current account was in surplus at $32.5bn, and the figure is close to what GKEM Analytica expected (around $35bn or 2.4% of GDP). Meanwhile, in 2019 the current account surplus was twice as wide – $64.8 bn.The trade balance posted a surplus equal to $91.9bn as exports and imports reached $328.6 bn and $236.7 bn (GKEM Analytica expected $89.4, $329.6, and $240.1 accordingly). The initially reported negative 2Q20 current account, was upgraded to positive $0.9bn. One cannot rule out that later, the 3Q20 and 4Q20 data will be revised up also.Russia’s non-energy exports accounted for almost 55% of total exports and remained stable in 2020 relative to 2019 in nominal terms. In 4Q20, the non-energy exports increased to $54.9 bn compared to $47.0bn in 3Q20. Total gas exports (including LNG) reached $31.9 bn (and posted an increase in 4Q20 relative to previous quarters). Exports of LNG grew y-o-y and accounted for over 21% of total gas exports.In 2020 Russia's total exports were down by 21.5% as the oil and gas prices collapsed, while total imports decreased by 5.7%. A moderate contraction of imports resulted from the fact that the Minfin/CBR duo supported the ruble by intervening in the FX market. Therefore, the ruble depreciation was quite moderate compared to the correction of the oil price.This year the current account surplus is expected to widen to around $40bn.Evgeny GavrilenkovAlexander Kudrin

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