Growth in Russian imports stalls; capital outflows increase

Preliminary balance-of-payments figures show that the value of Russian exports of goods and services increased by nearly 30 % y-o-y in the third quarter of this year. Higher oil prices were the main driver of higher export earnings. In contrast, on-year growth in spending on imports of goods and services came to a halt in July-September, with growth for the first nine months only reaching 5 %.

The large current account surplus was due to Russia’s traditional goods trade surplus. The services trade deficit was identical to a year earlier. Russia posted a large January-September current account surplus of 76 billion dollars. The total surplus from the last four quarters amounted to about 5.5 % of GDP.

A net 19 billion dollars in private capital flowed out of the country in the third quarter, bringing the value of net capital outflows for the first nine months of the year to 32 billion dollars (the annual outflows in 2016 and 2017 averaged slightly over 20 billion dollars). In January-September, foreign direct investment inflows to the corporate sector (excl. banks) were exceptionally modest, a mere 2.4 billion dollars. Russian FDI outflows amounted to 17 billion dollars, roughly the same amount as in previous years. The foreign debt of banks has shrunk this year yet again slightly faster than non-bank corporate debt. At the mid-year mark, the foreign debt of Russian banks amounted to 95 billion dollars. The last time Russian banks had so little foreign debt was in 2006.