Export earnings fattened Russia’s Q1 current account surplus; substantial capital outflows

The CBR’s unusually thin preliminary balance-of-payments report shows that the value of Russian exports of goods and services in the first quarter of this year increased by 50 % y-o-y to 157 billion dollars. Export revenues have soared on high prices for oil and other global commodities. Western sanctions have had a limited effect on Russian exports as they only apply to a small percentage of Russian exports. The value of imported goods and services amounted to 90 billion dollars, up 14 % y-o-y. Most of the growth likely came from the start of the year. Indicative evidence suggests that Russian imports plunged in March.

The rapid growth in export earnings, combined with more moderate import development, boosted Russia’s current account surplus to a historical high of 58 billion dollars in the first quarter. The four-quarter total (2Q21 to 1Q22) corresponded to roughly 10 % of Russian 2021 GDP.

Considerable amounts of capital flowed out of Russia in the first quarter. The net Q1 capital outflow of the private sector was 64 billion dollars. Most capital outflows apparently occurred before Russia’s February attack on Ukraine as capital controls were implemented in March. Similar large outflows of capital were last seen in late 2014.

Russia posted a historically large current account surplus in the first quarter, but capital outflows from Russia were substantial

Sources: Central Bank of Russia, CEIC and BOFIT.