Page 55 - RusRPTJun20

5.0​ External Sector & Trade 5.1​ External sector overview
Russia’s trade volumes will shrink by about two fifths this year, but thanks to falling imports the balance will remain positive​. BCS GM estimates that exports could decline by over 37% y/y in 2020. Despite a significant fall in export volumes in physical and $ terms, analysts estimate that Russia will maintain a positive trade balance as volumes of imports will likely also fall by 35% y/y. As a result, albeit down by 41% y/y, a trade surplus will remain sizeable at about $97bn in 2020 and the current account in suplus to the tune of $28bn, down from $75bn in 2019. One of the factors holding up the current account is the small amount of net capital outflows as the capital flight that was going to happen (actually mostly debt repayments) already happened in 2014.
Russia has so far retained surpluses in its external accounts. ​While the data is preliminary and subject to revisions, it nevertheless shows that Russia has managed to escape significant deterioration in its balance of payments.
In April, Russia maintained double surpluses in its external accounts. Preliminary estimates released by the CBR showed that Russia’s trade balance ended last month with a surplus of $3.5bn ($35.6bn in 4M20) – a large drop from $14.6bn in April 2019, but still a positive surprise, given the almost 75% y/y decline in the price of Urals crude.
The current account was also in surplus of $1.8bn ($23.5bn in 4M20) helped by the trade surplus and modest volume of capital outflows. The latter reached $6.9bn in April ($23.9bn in 4M20) – a far cry from the monthly outflows of between $20bn and $50bn that Russia recorded in late 2008 and early 2014.
“We retain a +ive view on trade and current account surpluses in 2020. The latest data on Russia’s balance of payments clearly shows that the double shock to the country’s external accounts, caused by the collapse in oil prices and the halt to many export-import operations due to quarantine restrictions, has been largely offset by a major decline in the volume of imports and the relatively stable situation in the country’s capital account,” says ​BSC Global Markets​ chief economist Vladimir Tikhomirov.
“We forecast that in FY20 Russia’s foreign trade surplus will reach $102bn, while its current account will be closed with a surplus of $45bn. Both estimates are much more bullish than those from the CBR: according to the bank’s April forecast, the CBR expects to see a trade surplus of just $43bn in 2020 and current account in a deficit of $35bn,” Tikhomirov added.
Russia’s foreign trade surplus fell by 38% to US $10.479bn in March, ​the Federal Customs Service said on May 19. Exports decreased amounted to $29.7bn in the period, imports to $19.2bn. In January–March, Russia's trade surplus fell 30.5% to $35.5bn. Exports fell 15% to $89.5bn, imports 0.2% to $54bn.
Within the sectors the performance was very mixed. Sectors that saw
55​ RUSSIA Country Report​ June 2020 ​ ​www.intellinews.com