Page 8 - FSUOGM Week 05 2023

FSUOGM COMMENTARY FSUOGM

The reduction in supplies to the EU was same time, the value of deliveries to Russia from
partly compensated for the increase in exports China grew by more than a quarter y/y in Octo-
to China via the Power of Siberia gas pipeline in ber-November. Those from Turkey also almost
excess of contractual obligations. In December, doubled y/y in terms of the value of deliveries of
the Kovykta-Chayanda section of the Power goods to Russia in October-November.
of Siberia gas pipeline was brought into oper- Increased support for the import of goods
ation, increasing Chinese deliveries. This pipe- through the mechanism of parallel imports grew.
line is connected the Kovykta field, the largest In October, the list of goods for parallel import
in terms of gas reserves in Eastern Russia, and was expanded. Alcoholic and non-alcoholic
potentially can raise gas exports to China fur- drinks, a number of trademarks of chemical
ther in 2023. industry products, electrical equipment, meas-
“At the same time, in the conditions of a mild uring instruments, and so on were added to the
winter and high stocks in the EU, the price of list, the CBR reports.
gas in Europe, an important market for Rus- “According to the head of the FCS of Russia
sia, decreased from $2,281 per thousand cubic V.I. Bulavin, since the beginning of the parallel
metres in the third quarter to $1,400 per thou- import mechanism (since May), goods with a
sand cubic metres on average in the fourth volume of 2.4mn tonnes worth more than $20bn
quarter. have been imported, primarily cars, machine
“In the fourth quarter of 2022, it was more tools, equipment, production lines,” the CBR
than three times higher than the average for the said. “A significant volume of goods imported
fourth quarter over the previous five years. Thus through parallel imports fell on goods for every-
world and export gas prices remained at a high day use, clothing and perfumes.”
level,” the CBR said. The recovery of imports was also facilitated
Non-oil export of goods and services by the preservation of a stronger ruble compared
There was a redirection of non-oil and gas ex- to the same period in 2021, which made these
ports of a number of goods from European to imports much cheaper for Russians. The real
Asian markets. At the same time, it was held effective ruble exchange rate rose by 33% y/y in
back by weakening demand due to expecta- 4Q22 against a gain of 46% y/y in 3Q22.
tions of a global slowdown as a result of the “At the same time, unilateral restrictive meas-
polycrisis. ures by individual states and the withdrawal of
According to Eurostat, the volume of coal foreign companies from the Russian market,
supplies from Russia to the EU in the fourth as well as problems with payments and logis-
quarter fell to zero due to a complete ban on tics, continued to exert downward pressure on
its import to the EU from August 10, the CBR imports,” the CBR reports.
said. “At the same time, demand for Russian
coal increased from Asian countries and Turkey, Current account balance
attracted by discounts.” The positive balance of the financial account
The drop in the physical volume of ferrous in the fourth quarter of 2022 was $30bn. It was
metals supplies to the EU from Russia increased noticeably lower than in the previous quarter
to 68% y/y in October (vs 3Q22 -60% y/y), ($45bn) as well as in the fourth quarter of 2021
according to Eurostat. ($48bn).
“At the same time, the contraction of exports Net lending to the rest of the world was car-
to the EU was completely compensated due to ried out mainly in the form of an accelerated
the reorientation of supplies to other states,” the decline in external liabilities, which were down
CBR said. “The export of services, especially by $23bn in 4Q22 after a decrease of $3bn in 3Q
transport, in the fourth quarter of 2022 contin- 2022. In the fourth quarter of 2021, there was a
ued to be constrained by a decrease in the phys- net increase in foreign liabilities by $3bn.
ical volume of deliveries of goods, the closure of Foreign asset growth was $7bn in 4Q22 (vs
airspace, restrictions in the field of maritime and 4Q21 of $51bn). Overall, in 2022, the positive
road transport.” financial account balance was $223bn (vs 2021:
$122bn).
Import of goods and services It was formed in 2022 both by an increase
The value of imports of goods and services con- in foreign assets (+$107bn) and a reduction in
tinued to recover in 4Q22. The contraction nar- foreign liabilities (-$116bn), including due to the
rowed to 9% y/y (vs 3Q22 -13% y/y). withdrawal of non-residents from the capital of
“The dynamics improved due to the replace- Russian companies and the repayment of foreign
ment of the dropped supplies from the EU debt non-financial enterprises.
through the expansion of imports from other The volume of international reserves for the
“friendly” countries. fourth quarter of 2022 increased to $582bn as of
The volume of deliveries of goods to Russia by January 1, 2023 (as of October 1, 2022: $541bn).
value based on World Bank from the EU almost The change is due to the revaluation of foreign
halved y/y in October, mainly due to machinery, exchange assets and gold when the US dollar
equipment and vehicle import declines. At the weakens on the world market. ™

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