Page 65 - RusRPTFeb23

5.2.2 Current account dynamics
Russia raked in about $158bn in energy exports in the first six months of the invasion of Ukraine, according to the Finland-based Center for Research on Energy and Clean Air. In March and April, Russia even set new records for oil and gas revenues.
Russia’s current account surplus is set to fall to around $100bn in 2023.
The focus in media reports on Russia’s record current account surplus in 2022 misses the huge deterioration at the end of the year. We think the balance of payments will be squeezed further, raising the chances of a sharp external adjustment.
“Figures released by Russia’s central bank this week showed a record current account surplus of $227bn in 2022 (around 11% of GDP). A lot of attention has focused on the strength of energy exports and the decline in imports but this was largely a story for the first half of last year and the situation changed rapidly towards the end of 2022,” Liam Peach, an emerging market economist with Capital Economics, said in a note.
Russia ended 2022 with a current account surplus of around $270bn – more than twice the previous record high of $120bn set in 2021 – but this year that is expected to fall to $100bn, Elina Ribakova, deputy chief economists at Institute of International Finance (IIF), told bne IntelliNews.
The fourth quarter of 2022 surplus of $31bn was the smallest since mid-2021 and the monthly figures – while not entirely comparable as they are based on pre-revised data – show a drop in the surplus to less than $5bn in December, Peach adds.
Russia was running a budget surplus all year until December, when oil and gas revenues tanked thanks to the start of the Western embargo on oil exports on December 5. The budget ended the year with a 2.3% deficit, coming from the fall in revenues in December alone, although Russian Finance Minister Anton Siluanov talked up the result, claiming that taking out special spending the actual deficit was 1.8%.
Income in 2023 will be further negatively affected when a more serious oil products embargo is put in place on February 5 that should reduce oil and gas revenues further.
The Central Bank of Russia (CBR) has reintroduced the budget rule that siphons off excess oil and gas revenues to the National Welfare Fund (NWF), but it has made an important change: whereas previously the trigger for moving money to the NWF was the oil price, set at $42 per barrel, under the new regime it is the actual oil and gas revenues themselves that trigger the
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