The current account widens in October, while imports may have remained stable

RUSSIA ECONOMICS - In Brief 11 Nov 2020 by Alexander Kudrin

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The Russian Central bank reported that in 10m20 the current account surplus reached $29.9bn, which means that in October alone this surplus was rather strong having reached $5.8bn. In 9m20 the current account surplus was much lower – $24.1bn, and in 3Q20 it was just $2.5bn. The trade balance widened to $73.0bn in 10m20 from $64.8bn in 9m20 implying a surplus of $8.2bn in October. Meanwhile, in September the trade surplus was reportedly wider - $10.1bn. No other details about the composition of the 10m20 current account were provided yet – just the aforementioned two flash estimates.It looks as though the widening of the current account surplus to some extent could have stemmed from a decreased deficit of the investment income balance, which remained rather negative both in 2Q20 and in 3Q20 (-$11.6bn and -$9.0bn respectively). It cannot be ruled out that Russia’s exports continued to climb up as well in October following an increase up to $30.5bn in September (from $23.2bn in August), while imports, which fluctuated around $20bn in July, August, and September, may have changed little last month.Earlier the CBR reported that consumer credits continued to expand in September and together with credits to non-commercial organizations servicing households reached nearly R21 trln (including the ruble equivalent of an insignificant amount of credits in foreign currencies). In September these credits grew by 1.7% which was more or less on a par with the average monthly growth in July and August, but well above the monthly inflation rate. Continuous expansion of consumer credit keeps imports elevated, and at the same time supports construction activity as some mortgages and car ...