​Russia’s current account remained strong in 1Q22 and in March as well

RUSSIA ECONOMICS - In Brief 11 Apr 2022 by Alexander Kudrin

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The CBR published its first estimate of the country’s 1Q22 current account which reportedly reached $58.2 bn. The trade balance over the same period accounted for $66.3bn, as exports and imports reached $156.7bn and $90.4bn. All numbers looked strong, including for March as in January exports and imports accounted for $45.9bn and $24.7bn. As February is a short month, implying lower foreign trade numbers, in March both exports and imports were very strong. A very strong current account hints that capital outflow was significant, especially in March when part of the capital outflow occurred in the form of internal outflow, i.e., conversion of FX savings in banks into paper money (the ruble weakened as a result). Given that in early April the ruble has bounced back, the capital outflow has likely decreased, while the current account still remained strong. The 1Q22 statistics suggest that as both the current account and capital outflow were strong, generally speaking, Russia doesn’t need to export as much as it used to as saving in FX is no longer attractive and desirable both for the government institutions and big businesses as extra cash will be almost certainly confiscated. As imports will be cut by sanctions, some key Russian exporters will think twice before deciding to export extra volumes of their products. The 1Q22 data suggests that generally, Russia has no problems in repaying and servicing its foreign debtEvgeny GavrilenkovAlexander Kudrin