In light of the new data, we note downside risks to the Bloomberg forecast of USD 14.9bn. Were the print to be confirmed at USD 14.3bn, (the CBR is due to release its data today), that would be the lowest reading since January 2011.
The preliminary data on non-CIS imports for July showed strong growth, from USD 22.2bn in June to USD 24.9bn in July (+7.1% MoM SA) with YoY growth rates improving from 0.1% to 13.1%. The growth was broad-based with imports ex-volatile components (planes, ships, sugar, vegetables and pharma) accelerating from 3.4% YoY in June to 10.8% in July. Volatile components also showed a strong result, at USD 2.4bn (+39.0% YoY) primarily due to an increase in the import of planes (USD 930mn in July vs. USD 375mn in June).
Cars and other vehicles (USD 3.8bn, +21.5% YoY) and investment goods (USD 11.9bn, +10.3% YoY) were the key drivers of import growth. We therefore forecast strong investment activity in July.
The strong import data for July partly explains the relative RUB weakness in the past month and a half (despite the almost 30% jump in Urals). With oil above USD 110/bbl, we expect Russia’s current account to stay above the 0 mark until the end of the year, despite weakness in the trade balance in June-July. Under this scenario, RUB will likely stay roughly where it is before the start of the seasonally positive 1Q13. Given the strong import data from July, the expected negative impact on the trade balance from recent global and local harvest problems and our expectations of weaker oil prices later this year.