In Russia CA surplus widens to USD2.8bn in Q2

The current account surplus widened to USD2.8bn in Q2 from USD2bn in Q2 2016, according to revised BoP data published by the CBR on Friday. Preliminary figures suggested that the CA ran an unusual deficit of USD0.3bn. The main reason behind the revision was the lower deficit in the primary income account (USD13.4bn vs. USD16bn previously) and, to a lesser extent, the higher trade surplus (USD25.1bn vs. USD24.8bn). Yet, the secondary account faced somewhat higher deficit in Q2 than previously thought. The financial account also saw revisions and the new data point towards an outflow of funds totaling USD5.3bn. Reserve assets fell by USD7.6bn, in line with preliminary figures. The errors and omissions item practically did not change, staying at the rather high USD2.8bn.

The CA surplus came in at USD25.4bn in H1, up from USD10.5bn in H1 2016, due to much higher trade surplus, underpinned by higher oil prices. Note that export growth of goods (+29.4% y/y in H1) was below the average price increase of Brent oil in H1 (+34.7% y/y), suggesting that the non-oil goods sector underperformed. Net private sector capital outflows reached USD16bn in H1 (revised from USD15.1bn), up from USD8.6bn a year ago, because banks reduced their debt load and built up their external assets. The CBR expects net private sector capital outflows to reach USD17bn in 2017, though the H1 outcome suggests that the actual outcome may be bigger. The H1 CA surplus represents 1.6% of annual GDP.

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