Estimate of Key Aggregates of the Balance of Payments of the Russian Federation

The essentials:

The Bank of Russia published the first estimate of the balance of payments of the Russian Federation in May 2024 года and revised the estimates for January — April 2024 due to the receipt of additional reporting data as of June 14, 2024.

The current account surplus in May 2024 was $5.1 billion against $7.1 billion in April 2024. Its decline against the backdrop of a stable trade balance is associated with a slight increase in the deficit in the balance on investment income, primarily due to dividends declared by a number of large Russian companies in May.

The current account surplus in January — May 2024 increased to $38.1 billion from $21.0 billion in the corresponding period of 2023 due to both the expansion of trade balance and the reduction in deficits of other current account items.

Key Aggregates in details in May 2024:

• the trade balance surplus amounted to $10.6 billion, virtually unchanged compared to the updated indicator of April 2024 and May 2023;
• the deficit in balance on services of $2.7 billion increased mainly as a result of the seasonal increase in expenses of Russians during foreign trips;
• the total deficit in primary and secondary income grew to $2.9 billion ($1.4 billion a month earlier): the key driver was the increase in the volume of dividends declared in favor of non-residents by large Russian companies;
• foreign assets (excluding reserve assets) increased by $9.6 billion (by $6.1 billion a month earlier) due to the rise in claims on outstanding foreign trade settlements, as well as the acquisition of stakes in the equity of foreign companies;
• external liabilities grew by $2.0 billion (decreased by $1.4 billion in April 2024) mainly due to the growth in direct investment, including reinvestment of income, and the increase of liabilities on dividends declared by Russian companies;
• reserve assets declined by $2.9 billion (rose by $2.0 billion in April 2024), including as a result of temporary increase in the limit on swap transactions to smooth the volatility of domestic money market rates for foreign currency.

Key Aggregates in January – May 2024:

• the trade balance surplus grew to 56.0 billion against 47.6 billion in January – May 2023 due to more significant drop in imports compared to exports. The estimate in April 2024 was increased for exports of goods and decreased for imports, taking into account the received reporting data from the Federal Customs Service;
• the deficit in balance on services decreased to $9.6 billion against $13.2 billion in January – May 2023 mostly due to the decline in imports of travel services against the backdrop of weakening Russian ruble;
• the decline in total deficit in primary and secondary income to $8.3 billion from $13.5 billion a year earlier was affected by both the decrease in the volume of dividends accrued in favor of non-residents and the reduction in personal transfers payable;
• the growth in foreign assets (excluding reserve assets) by $41.4 billion (by $15.8 billion a year earlier) is associated with the acquisition of stakes in the equity of foreign companies and the increase in claims to non-residents on outstanding settlements as a consequence of lags in settlements for foreign economic activity;
• the reduction in external liabilities was $7.3 billion ($6.9 billion in January – May 2023), among other things, due to the reduction in direct investment and the redemption of raised loans;
• international reserves declined by $7.9 billion (by $6.0 billion a year earlier) mainly as a result of transactions with the funds of the National Wealth Fund and transactions to regulate foreign exchange currency liquidity based on currency swap transactions.