Page 54 - RusRPTNov20

impact seen in September. Despite the recovery in oil prices, which triggered more optimistic trade terms, capital outflows led to the RUB/$rate depreciating an additional 2% q/q to 73.6.
Russia's foreign trade signs of recovery, capital inflows abroad quite large. ​According to the Central Bank's preliminary balance of payments data, Russia's exports of goods and services were still almost 30% lower year-on-year in the third quarter.
The drop figure was slightly lower than in the second quarter. Revenues from exports of oil, petroleum products and gas were still almost half lower than a year earlier. Revenue from exports of other goods, on the other hand, has fallen by only a few% this year, and in the third quarter it was quite close to the level a year earlier. Revenues from exports of services have fallen by almost 40%, mainly due to the collapse in tourism revenues.
Russia's spending on imports of goods and services remained almost a quarter lower in the third quarter than a year earlier. However, imports of goods are on the recovery and in September it was already close to the September 2019 reading. Imports of services, on the other hand, remained more than half as low as a year ago in the third quarter, and September did not bring much relief to the situation. Russian tourism spending abroad (just over a third of service imports in 2019) was still 90% lower and imports of other services almost a quarter lower than a year earlier.
Russia's current account surplus has been exceptionally small for the past six months, as export earnings have fallen significantly more than import spending. In this way I have the last four quarters, the surplus in the third quarter decreased by less than 2.5% of GDP.
The financial balance between Russia and abroad has been in considerable deficit this year, which has weakened the ruble. There have been far fewer investments in government bonds from abroad than last year, in contrast to domestic sources of financing the government budget deficit. There has been quite a net inflow of private capital from Russia abroad. Banks ’external debt, which today consists mainly of foreign deposits and accounts with banks, continued its multi-year decline in the third quarter (excluding the effects of changes in the ruble exchange rate). Banks have also reduced their foreign claims. The net inflow of capital from the Russian corporate sector to the rest of the world increased in the third quarter to the extent that the outflow in the last four quarters was less than 2.5% of GDP, the highest in five years. The main reasons are the withdrawal of portfolio investments from abroad to the Russian corporate sector and portfolio investments from the Russian corporate sector abroad. The flow of foreign direct investment to the Russian corporate sector has fallen to a very small level this year. Direct investment from the Russian corporate sector abroad has almost stagnated after many brisk years.
54 ​RUSSIA Country Report​ November 2020 www.intellinews.com