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Trade surplus narrowed to 9-month low in April

According to the CBR, the trade surplus in April edged down to USD 14.2bn (from USD 16.1bn in March), the lowest level since August 2012, contracting 21.8% in annual terms. Exports continued to decline, but the contraction slowed to 2.4% YoY and returned into the black in MoM SA terms: +3.0%. The growth in annual imports again jumped sharply: 10.7% YoY (as in January 2013) from a decline of 2.0% YoY in March, and also added visibly 7.4% MoM SA (from -6.0% MoM SA a month ago).

The external trade balance data for April underpinned our idea that the March pick-up in the trade surplus was temporary and is set to shrink gradually in the near future unless vivid growth on the commodity markets sparks back into life.

The jump in 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 sluggish. In May, we are likely to see a downwards correction in imports growth due to preliminary non-CIS statistics.

At the same time, amid decreasing oil prices, export volumes kept contracting in YoY terms during April on almost all key exports items (gas, crude oil and metals) and, according to our base case scenario, which implies oil at USD 100/bbl YE13, they are set to drop further in the months to come.

All in all, Russia’s trade balance is likely to shrink in the medium term, we think, putting pressure on RUB.

Maxim Oreshkin, Daria Isakova, Alexey Zabotkin
VTB Capital analyst

CBR, dollar, ruble

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