Page 69 - RusRPTMay21

5.2.2 Current account dynamics
Russia's current account surplus reached $16.8bn in 1Q21, up from $13.1bn in 4Q20 but still below the $23bn registered a year earlier, according to the CBR's preliminary estimates the central bank said on April 13.
The main reason for the y/y contraction was a weaker trade balance (a $24.4bn surplus in 1Q21 versus a $33.1bn surplus in 1Q20).
Exports fell 2% y/y to $87.5bn in 1Q21, driven by a decline in crude and oil product exports (down 20% y/y), which was mostly offset by an increase in exports of natural gas (up 44%) and non-oil and gas exports (up 12%).
Meanwhile, imports continued to recover in 1Q21, rising 12% y/y to $63.1bn.
The decline in oil exports was a reflection of the continued output restrictions under the OPEC+ deal -- production was down 10% y/y in 1Q21, while exports fell 17.5% -- as well as the lag between market and export prices.
“As the average Brent price in March was up 179% y/y and 156% y/y at the beginning of April, we expect the higher oil prices to support oil exports in dollar terms starting from April,” Sberbank CIB said in a note.
“As the Brent price remains high (our commodity strategists expect it to average $68/bbl in 2021), we expect the current account surplus to reach $70bn this year (4.3% of GDP), up from $33.9bn last year (2.3% of GDP, an estimate that was revised slightly upward),” Sberbank added.
Although exports continued to improve, especially in the gas and other goods segments, the surge in imports offset this in the first quarter.
Capital outflows in the private sector eased to $11.8bn in 1Q21 due mainly to the accumulation of assets, not the repayment of liabilities.
The public sector still saw $1.2bn in outflows due to large sales of government paper by non-residents.
After quarters of low oil prices, the accumulation of reserves resumed, with international reserves adding $3.7bn in 1Q21 after losing $2.3-12.9bn in 2Q-4Q20.
Elsewhere, the investment income deficit widened from $1.7bn in 1Q20 to $3.7bn in 1Q21 on lower income from abroad. The secondary income balance saw a deficit of $1.5bn.
On the financial side, net private capital outflows eased on a y/y basis, falling
69 RUSSIA Country Report May 2021 www.intellinews.com