Russian current account surplus shrank 78.7% to $50.2 bln in 2023 - Central Bank estimate

MOSCOW. Jan 19 (Interfax) - Russia's current account surplus shrank 78.7% to $50.2 billion in 2023, from a record $238 billion in 2022, according to an estimate published on the Central Bank's website.

The trade surplus fell 63% to $118.3 billion in 2023 from an all-time high of $315.6 billion in 2022.

The decrease in the trade surplus by $197.3 billion to $118.3 billion compared to 2022 was due to a drop in exports by $169.4 billion or 29% from an all-time high of $592.1 billion to $422.7 billion, which is mainly explained by the deterioration in the price environment for the main Russian export goods, with an increase in imports of goods by $27.9 billion or 10% from $276.5 billion to $304.4 billion, the Central Bank said in a commentary.

The current account surplus fell to an estimated $10.7 billion in Q4 2023 from $16.3 n in Q3, $7.5 billion in Q2 and $15.8 billion in Q1.

The trade surplus fell to $28 billion in Q4 from $33.3 billion in Q3, $26.3 billion in Q2 and $30.7 billion in Q1. Exports fell to $105.1 billion in Q4 after rising to $108.9 billion in Q3 from $103.4 billion in Q2 and $74.5 billion in Q1 and imports rose to $77.1 billion in Q4 from $75.7 billion in Q3, the figures being $77.1 billion in Q2 and $74.5 billion in Q1.

The Central Bank published a preliminary estimate of the balance of payments in December 2023 and revised estimates for October-November 2023 due to the receipt of additional reporting data. The increase in estimates of both exports and imports of goods in October-November 2023 is due to the updating of actual customs statistics.

The current account surplus in December 2023 amounted to $0.6 billion compared to $4.7 billion in November and $5.4 billion in October 2023. The trade surplus was $8.7 billion in December, as in November, and $10.7 billion in October: the stable surplus in trade balance was offset by the seasonal increase in the deficit in the balance on investment income and other components of the current account.

The services trade deficit expanded by $11.4 billion or 50% from $22.2 billion in 2022 to $33.6 billion in 2023, which was affected by the growth in imports of travel services due to the revival of outbound tourist flows.

The total deficit in primary and secondary income reduced by $20.8 billion or 38% to $34.5 billion from $55.3 billion mostly as a result of a drop in dividends accrued by Russian companies in favor of non-residents compared to the previous year.

Foreign assets grew by $38.3 billion or $63.2 billion less than the $101.5 billion by which they grew in 2022. The accumulation of residents' funds in foreign accounts and deposits, the growth in other investment in the form of claims on outstanding foreign trade settlements, as well as the increase in direct investment played a significant role, the Central Bank said.

The decrease in external liabilities in 2023 by $1.8 billion compared with $126.1 billion a year earlier was due to the redemption of debt instruments, including within the framework of the bond substitution mechanism, as well as a result of the withdrawal of non-residents from the capital of Russian companies and simultaneous increase of funds of non-residents in accounts of type C.

Russia's external debt decreased by $57 billion or 14.9% in 2023 to $326.6 billion, from $383.6 billion in 2022.

It grew $4.3 billion in Q4 after falling $17 billion in Q3, $18.5 billion in Q2 and $25.8 billion in Q1.

The drop was largely influenced by the reduction of the debt of other sectors on raised loans, including within the framework of direct investment relationship, by $43.7 billion or 18% to $199.4 billion. A significant drop in general government indebtedness, by $13.4 billion or 29% to $32.7 billion, was caused by a decrease in the volume of the Russian sovereign debt securities at the disposal of non-residents, including as a result of their scheduled redemption, the regulator said.

Combined banking sector and CBR debt was little changed.

The Central Bank's baseline scenario, updated at the end of October, projected that if Brent crude trades at $83 per barrel there would be a current account surplus of $60 billion, visible trade surplus of $122 billion, deficit in services trade of $31 billion and primary and secondary incomes deficit also of $31 billion in 2023.

The Central Bank forecast that if Brent crude trades at $80 per barrel there will be a current account surplus of $75 billion, visible trade surplus of $149 billion, deficit in services trade of $31 billion and primary and secondary incomes deficit of $43 billion in 2024.