Trade and Capital Flows—rising trade surplus, declining net capital outflows The balance of payment position strengthened thanks to a strong current account, although the non-oil current account deficit remained high. This, together with the moderation in capital outflows in the second and third quarters, allowed the Central Bank of Russia to add to its foreign reserves. The external current account benefited from high oil prices. The current account surplus rose to US$74.6 billion in the first nine months of 2012 from US$70.5 billion in the first nine months of 2011 (Figure 8 and Table 2). The weakening of the current account from the first quarter to the second and third quarters of 2012 was partly seasonal, in addition to higher interest payments of the private sector in the income account. From the first to the second quarter of 2012, on a four quarter rolling basis, the current account surplus increased from 4.3 percent of GDP to 5.6 percent of GDP. The trade balance benefited from high oil prices (Figure 9), even though the growth in dollar export values declined in line with weak external demand since the beginning of the year. At the same time, the growth of import values dropped as weaker industrial production and fixed capital investment translated into lower import demand (Figure 10). The depreciation of the ruble in May and June also dampened food imports. As a result, the surplus in the trade balance for goods improved from 11 percent of GDP in the first half of 2011 to 12 percent of GDP in the first half of 2012 (Figure 11). Figure 8: Current account balance
Figure 9: Trade balance and oil prices
0
40
-20
30
-40
20
-60
10
-80 2007Q1
0 2008Q3
2010Q1
140
60
120
50
100
40
80
30
60
20
40
10
2007
2011Q3
2008
2009
2010
2011
2012
Crude oil, Brent, $/b (left axis) Trade balance, bln USD (right axis) Source: World Bank staff calculations based on Rosstat and CBR data.
CAB, no oil and gas, bln USD (LHS) CAB, bln USD (RHS) Sources: CBR; and World Bank staff estimates.
Table 2: Balance of Payments, 2007–2012, US$ billions Current account balance Trade balance Capital and financial account Errors and omissions Change in reserves (- = increase) Memo: average oil price (Brent, US$/barrel) Source: CBR. * Preliminary estimates.
2007 77.8 130.9 84.5 -13.3 -148.9 72.5
2008 103.5 179.7 -131.2 -11.3 38.9 96.9
2009 48.6 111.6 -43.5 -1.7 -3.4 61.5
2010 71.1 152.0 -26.0 -8.3 -36.8 79.7
2011 Q1-3 2011 Q1-3 2012* Q1 2012 Q2 2012 Q3 2012* 98.8 70.5 74.6 40.4 21.2 13.0 198.2 144.0 150.4 59.2 50.1 41.2 -76.2 -45.2 -40.8 -29.8 -2.0 -9.0 -10.0 -4.2 -12.9 -6.0 -4.3 -2.6 -12.6 -21.2 -21.1 -4.6 -15.0 -1.5 111.1 111.6 112.4 118.7 108.8 109.9
In spite of the large current account surplus, the large non-oil current account deficit indicates that the economy remains vulnerable to terms of trade shocks. According to preliminary estimates, the non-oil deficit of the current account reached US$115 billion, or 12.5 percent of GDP, in the first half of 2012, almost unchanged to the first half of 2011 (Figure 8). The share of non-energy exports in total goods export declined to 34 percent in the first nine months of 2012 from 35 percent in 2011 and 37 percent in 2009.