Impact of pandemic and restrictions on balance of payments amplifies in Q2
The influence of the coronavirus pandemic and the related restrictions on the balance of payments aggravated in 2020 Q2. Revenues from oil and gas exports declined due to the slump in both prices and quantities amid shrinking external demand caused by the recession in the global economy, as well as because of substantial production cuts by Russia under the OPEC+ deal. These are the findings given in the quarterly issue of the information and analytical commentary Russia’s Balance of Payments.1
The plunge in exports was partially offset by the contraction of imports and the reduction in the deficit of the balance of other current account components. Goods imports declined due to sluggish domestic demand dragged down by the pandemic and restrictions, as well as due to the weakening of the ruble. Imports of services in the ‘Travels’ item almost discontinued following the suspension of international passenger services.
Amid the downturn in the global economy and investors’ risk-off sentiment, net foreign investment in other sectors decreased, and banks’ liabilities continued to go down slightly faster year-over-year.
Fiscal rule-based foreign currency sales caused a reduction in reserve assets. However, the overall level of the international reserves increased as of the end of the quarter since the positive revaluation, primarily resulting from the growth of world gold prices, offset the decline owing to the transactions recognised in the balance of payments.
1 The commentary on the balance of payments includes a preliminary estimate of its indicators in 2020 Q2 and actual data on the international reserves.
