Strong 2021 current account amid growing non-energy exports, higher energy prices, and a not-too-negative services balance

RUSSIA ECONOMICS - In Brief 18 Jan 2022 by Alexander Kudrin

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The Central bank reported that the Russian current account surplus reached $120.3 bn in 2021, which was a bit less than expected as the investment income balance turned more negative ($41.6 bn in 2021 versus $34.1 bn in 2020). Russia’s trade surplus widened to $185.9 bn in 2021 as exports reached $489.8 bn. Unsurprisingly, crude oil exports increased by nearly 52% as the oil price bounced back. Respectively, revenues from exports of natural gas also jumped by around 110%. Increased volumes of natural gas exports also contributed to this growth.The non-energy exports reached $249.1 bn having increased by over 36% relative to 2020. Despite a much higher oil price in 2021, the share of non-energy exports in dollar terms remained around 51% of the total having demonstrated growth in real terms as well.Imports grew strongly (by 26.2%) as restrictions on foreign travel have not been fully lifted and Russians couldn’t spend as much money abroad as they used to in the pre-pandemic era. The services balance was not too negative ($19.9 bn) as a result and didn’t change much relative to 2020 ($17.0 bn). The current account is expected to remain strong in 2022 as the economy keeps growing, energy prices are high, and it looks unlikely that restrictions on foreign travel could be suddenly lifted.Evgeny GavrilenkovAlexander Kudrin