The CA surplus rose to USD28.8bn in Q1’18 from USD22.3bn a year ago, according to the detailed preliminary figures published by the CBR on Monday. This is unchanged from the monthly estimate released earlier. The improvement is entirely on the back of a higher trade surplus, supported by higher oil prices (Brent price was up by 23.7% y/y in Q1). Exports and imports grew at similar rates and non-oil&gas exports also performed well, contributing to the improved trade surplus. The deficit in the services balance widened by USD1.9bn in Q1, mainly a result of recovering travel abroad, while the income account was similar to last year. We estimate that on 12-month rolling basis the CA surplus continued to improve and rose to 2.6% of the GDP in Q1 from 2.2% in the previous quarter.
The financial account posted outflows of USD8.2bn in Q1, diminishing from USD11.7bn a year ago. Net private sector capital outflows eased to USD13.4bn from USD16.9bn. Outflows remained dominated by acquisition of foreign assets by the private sector (USD12.1bn), but falling outflows reflect also a recovery of private sector borrowing. CBR reserves rose by a strong USD19.3bn in Q1 as a result of the CA surplus. The BoP position will clearly deteriorate in Q2 due to the selloff of Russian assets by non-residents, but at current oil prices the strong CA surplus should mitigate the impact.