March's customs report on imports reflects a continuing moderation of import growth, which has stabilised at low levels in recent months. Besides which, it also supports the idea that January’s upturn was a one-off.
The deceleration in the annual growth of the headline reading can be mainly explained by lower volumes of machinery (particularly, cars) and food imports.
Also, the growth of investment imports advanced slightly, which we treat as simply a rebound from February’s low – not a reverse in the downward underlying trend so far. Meanwhile, consumer demand for imports came to a standstill in March. From a trade balance perspective, slower imports imply support for a surplus in March and, as we expect import growth is likely to be subdued in coming months (on the back of a lacklustre expansion of internal demand amid fiscal and lending constraints), it would be positive for the trade surplus and the rouble in quarters to come. However, exports are set to contract even further, meaning that a moderation of imports would smooth the process of a narrowing trade balance, we believe.