Russia’s Account Surplus Decreased by 58.2%

WISCONSIN (CoinChapter.com) — Russia’s central bank reported that the current account surplus decreased by 58.2% to $8 billion in January due to lower export volumes, reducing the country’s capital reserves as Moscow increases budget spending.

The “current account” is the difference between all money coming into a country through trade, investment, and transfers and what flows back out. In January 2021, Russia’s current account was 1.41 trillion rubles, or $19.1 billion.

Due to declining imports and strong oil and gas exports, Russia’s current account surplus reached a record high in 2022, defying Western efforts to isolate the Russian economy over the crisis in Ukraine.

But due in part to price limits and embargoes on Russian oil and gas exports, Moscow is currently dealing with drastically decreased export receipts, which were down 35.1% year over year in January.

Central Bank Explanation

The central bank stated, “A key role was the large fall in the surplus of the balance of goods and services as a result of the decrease in the cost volume of exports of products.”

The Russian ruble has dramatically declined since the war with Ukraine. Credit: The New York Times

Energy-related revenue fell by 46.4% in January, which was extremely low. As a result, the federal budget of Russia saw a deficit of 1.76 trillion rubles or $24 billion in the first month of the year due to declining receipts and rising spending.

Current Account Up in 2022, But Now Down Due to Exports

The current account last year reached $227.4 billion, up 86% from 2021, the central bank reported last month, with the help of higher commodity prices during 2022.

The value of exports has decreased, as seen by the sharp decline in the price of Russia’s Urals mix, and this has placed pressure on the ruble, which recently fell to its lowest level since April of last year. This has exacerbated a gradual import rebound in the year’s second half.

The Urals price used in Russia’s 2023 budget is $70.10 per barrel, but its average price in January was $49.48 per barrel, a 42% decrease from January 2022.

Russia no longer publishes information on net capital outflows. However, without revealing specifics, the central bank stated, “The surplus in the financial account of the balance of payments was established by a decrease in liabilities to non-residents and an increase in the Russian economy’s foreign assets.”