The March trade surplus was supported by weaker imports and stronger exports. While the former stemmed from overall sluggish internal demand dynamics in Russia (the deepening contraction on the local car market was critical for the imports reading), the latter was largely caused by the jump in gas exports. Thus, according to customs, gas exports added 13.9% YoY in March following an almost 18% YoY decline in February and a 7% YoY drop in January. This was the result of the colder beginning to the spring in Europe.
We expect weak internal demand growth to continue, translating into soft imports growth (the forthcoming uptick in April, according to the preliminary data on non-CIS imports published by customs, will likely be short-lived). At the same time, Russia’s exports are set to follow a downwards path following the recent decline in oil prices. As a result, the trade balance surplus is set to deteriorate, putting pressure on the current account.
As far as April is concerned, the acceleration in imports (particularly the spike in the import of volatile items) coupled with lower oil prices could well result in a weaker external trade surplus than in 1Q13.