The Russian budget and the current account remained in surplus in April and in 4M20

RUSSIA ECONOMICS - In Brief 15 May 2020 by Alexander Kudrin
The CBR and the Finance Ministry reported that Russia’s key balances, such that of the federal budget and the current account were in surplus in April. The former institution reported that the current account surplus reached $23.5 bln in 4M20 implying a surplus of around $1.8 bln in April alone. As the oil price fell (the Urals blend averaged at $22.5/bbl that month) imports also should have fallen significantly. The CBR didn’t release export and import data – just the current account and the trade surplus and the latter reached $35.6 bln in 4M20 ($3.5 bln in April alone). So far, these numbers look much better than the 2020 CBR annual forecast released on April 24 during the Board meeting.The federal budget posted a small surplus in April even though the expenditures exceeded R2.26 trln, a very high number, as in 1Q20 federal budget expenditures accounted for R4.18 trln. In 4M20 the government already spent 35% of the annual target (which was not yet officially amended). The oil-and-gas revenues fell to R434.6 bln (versus nearly R600 bln monthly average in 1Q20), which was well anticipated. However, the non-oil-and-gas revenues jumped in April by over 76% y-o-y, and in 4M20 the government collected 36.6% of the annual plan. Therefore, in the case of total federal budget revenues tax collection also looked good – 34.0% of the annual plan in 4M20.On Monday GKEM Analytica will provide more color on these issues, including implications for economic growth and the situation on the markets.Evgeny GavrilenkovAlexander Kudrin

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