Russian imports recover to nearly same level as a year ago

Preliminary balance-of-payments figures released by the Central Bank of Russia show that Russia’s spending on imports of goods and services in the third quarter was only a few per cent below the level of 3Q15. Spending on goods imports was, however, already up on-year by several per cent. Russian spending on travel service imports was still in a deep slump, down 35 % y-o-y. Revenues from exports of goods and services were also still down 10 % y-o-y. The 3Q16 current account remained slightly in surplus, but the surplus was among the smallest in three years.

In the first nine months of the year, Russia’s cumulative current account surplus was just $16 billion, down from $54 billion a year earlier. The shrinking surplus mainly reflects the larger drop in exports than imports. In the last four quarters, the cumulative current account surplus has amounted to less than 3 % of GDP.

In the third quarter, the net flow of private capital on the financial account turned again slightly negative. This was due mainly to banks paying down slightly more foreign debt than in the second quarter. In addition, other firms also paid off their foreign debt while increasing their accounts receivable from abroad.

The private sector net capital outflow in the first nine months of this year amounted to $10 billion, down from nearly $50 billion in the same period last year. Underlying the shift was the contraction in foreign debt payments of banks and an increase in repatriations of foreign receivables. The net inflows of direct investment and portfolio investment to other sectors also increased, even if they were still rather modest.

Change in Russian spending on imported goods and services

Source: Central Bank of Russia.