Page 42 - RusRPTJun19

5.0 External Sector & Trade 5.1 External sector overview
According to Bank of Russia’s estimate, the surplus in the current account of the balance of payments of the Russian Federation in January–April 2019 amounted to $45.5bn against $39.4bn in January–April 2018.
The aggregate dynamics was driven to a practically equal extent by growing surplus on external merchandise trade and declining cumulative negative contribution of other current account components.
The balance on financial transactions of the private sector in January– April 2019, according to preliminary data, totalled $34.7bn (against $18.5bn in the comparable 2018 period). Virtually all increase of the aggregate on the outcome of the corresponding period of the preceding year was stipulated by the growing net acquisition of foreign assets by the banking sector, while the reduction of external liabilities was more substantial than a year ago. As a result of transactions, international reserves gained $21.7bn, mainly, because of foreign currency purchases on the domestic market under the fiscal rule and receipts of proceeds from sovereign bond placements.
Russia’s foreign trade surplus rises 2.5% to $45bn Jan–Mar, the current account surplus rises 9% to $33bn Jan–Mar and the capital outflow rose 57% to $25.2bn.
The main feature of Russia’s external trade in the first quarter is not so much the rising exports as oil prices spike to over $70 per barrel, but the fall in imports. This is connected to stagnant wages that are depressing retail and in turn depressing imports. The upshot is a healthy current account surplus that is actually a sign of economic weakness.
42 RUSSIA Country Report June 2019 www.intellinews.com