According to the CBR, the trade surplus has kept shrinking and decreased to USD 19.1bn in April, from USD 19.4bn in March. Exports growth was close to zero at 0.2% YoY, bringing April volumes to USD 46.0bn. At the same time, imports declined 0.9% YoY (to USD 26.9bn) in April (from a 5.9% YoY increase in March).
In addition, customs statistics showed that the growth in imports in May was not homogeneous among its main components: a core part (imports from non- CIS) edged up 9% YoY, while a volatile part (sugar, vegetables, pharmaceuticals, planes and ships) plunged 46% YoY.
The trade balance in April was mainly dragged down by lower exports due to a moderation in oil prices. Meanwhile, the low pace of annual growth is misleading due to the high base effect of both components. To recap, in 1H11 the growth in goods imports accelerated to 43% YoY on average, and last year April was characterised by surprisingly high exports.
Given the recent estimation provided by CBR Chairman Sergey Ignatiev, imports were at USD 29bn in May (3.0% YoY). At the same time, we think last month’s exports deteriorated because the oil price continued to slide (to USD 110/bbl in May). As a result, the trade balance has likely worsened in May towards USD 15-16bn. This process is set to continue in the coming months as oil is already trading below USD 100/bbl, while imports will be supported by seasonality. As a result, we think that the trade balance could decline below USD 10bn in July-August, bringing the current account surplus towards breakeven point. That would add significant downward pressure on RUB this summer.