CBR Chairman Sergey Ignatiev said today that import growth in May totalled 3% YoY. As a result, imports likely totalled USD 29.0bn last month.
Despite low YoY growth of just 3%, May 2012 import data should be viewed as strong owing to the high-base effect. In May 2011, sugar (USD 464mn), vegetable (USD 410mn), and ‘plane (USD 1,372mn) imports reached an abnormally high level. This year, however, the import of sugar and vegetables has been much lower due to last year’s excellent harvest, making a growth rate of 3% look solid. We will need to wait for the official customs’ report before we can judge whether or not May import data are a one-off. We expect the report to be released within the next few days.
The import data confirms strong internal demand growth (both consumer and investment), which is resulting in higher volumes of goods and services imports. This pushes the current account break-even oil price higher (which we expect to be around USD 95/bbl in 2H12) and poses risks for economic development, especially in an uncertain oil price environment.