The jump in non-CIS imports in April was exaggerated by the sharp upwards move in the growth of volatile components (in particular, planes and pharmaceutical goods), while the underlying growth of imports stayed almost flat at close to zero (+0.8% MoM SA). The acceleration in the annual growth of the nonvolatile reading can mainly be explained by the higher volumes of machinery (in particular, electrical equipment) and chemical goods. Interestingly, imports of food accelerated heavily in April due to the poor harvest in Russia last year.
We do not see the improvement in the growth of investment and consumer imports in April as a sign of local demand turning around. We expect import growth to remain subdued in the coming months. However, exports are set to contract even further, meaning that a moderation of imports growth would only slightly smooth the deterioration of the trade and current account balances and is unlikely to prevent RUB weakness in the coming months.