According to the CBR, the trade surplus in October decreased to USD 14.5bn (vs. USD 17.1bn in September). Exports were flat in YoY terms, at USD 46.1bn, and declined 3.6% MoM SA. Merchandise imports spiked 7.3% YoY to USD 31.6bn, but dipped 0.1% MoM SA.
In a separate news, the Russian Federal Customs reported that non-CIS import growth in November slid to 1.7% YoY (-0.5% MoM SA) vs. 8.2% YoY in October, bringing absolute volumes to USD 24.5bn. Growth of non-volatile components decreased to 2.4% YoY (USD 22.5bn) from 11.8% YoY in the previous month; imports of investment goods added a mere 4.0% YoY (USD 13.3bn) vs. 13.7% YoY in October. Importantly, car import growth dropped into the negative territory, declining 7.9% YoY, from a modest growth of 2.8% YoY in October. Furthermore, the decline in volatile items (ships, planes, etc.) decelerated to a 5.6% YoY loss (USD 2.0bn) from the 20.4% YoY drop a month ago.
The narrower external trade balance in October was in line with our expectation that it would contract, and can be explained with a rebound in import growth that month. The negative seasonally adjusted growth of exports (particularly in natural gas, which fell 7.4% MoM SA, and ferrous metals, which declined 10.0% MoM SA), also weighed on data.
November's customs report on imports reflects rather fragile growth, in our view, which is stabilizing at low levels after October’s sudden double-digit growth. As in October, growth was concentrated in non-volatile items, while imports of volatile items contracted. November’s decline in car imports coincides with a faltering economic outlook and reinforces our conservative view on consumer spending and bank lending in coming quarters.