Current account widens in 3Q23 as income balance turns less negative

RUSSIA ECONOMICS - In Brief 10 Oct 2023 by Evgeny Gavrilenkov

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CBR published its preliminary estimate of the 9M23 balance of payments, including some monthly numbers. The current account and the trade surpluses widened in September to $9.6 bn and $13.1bn from $5.7 bn and $11.0 bn in August. In July, these surpluses were much narrower ($1.3 bn and $6.1 bn). In 9M23, the current account surplus reached $40.9 bn as the trade balance widened to $87 bn. Exports and imports accounted for $314.7 and $226.8 bn in 9M23. Interestingly, quarterly exports and imports remained relatively unchanged this year and fluctuated around $105 bn and $75 bn. Services balance (traditionally negative) changed little by quarter and varied from $7.3 bn to $9.0 bn this year. Income balance (also traditionally negative) shrank to $4.5 bn in 3Q23 from $9.3 bn in 2Q23. It appeared to be the most striking change in the structure of the balance of payments. In 9M23, the negative income balance narrowed to $22.1 bn from $42.7 bn in 8M22 as the Western companies were exiting the Russian market, and those companies who replaced them (from China, for instance) had just started their business. Overall, the balance of payments will remain reasonably strong this year.