Balance of payments, international investment position and external debt of the Russian Federation in 2023

Balance of payments of the Russian Federation

The current account surplus in 2023 decreased compared to 2022 due to the decline in the trade balance surplus and the growth in deficit of other components of the current account.

Main components of the current account in 2015–2023, in billions of US dollars

Exports of goods declined by 28.3% mainly due to a drop in value of mineral raw material supplies in the context of deteriorating international price conditions.

Imports of goods, on the contrary, increased by 9.7% compared to 2022 indicator, having exceeded the 2021 indicator, with multidirectional dynamics of different groups of goods.

Trade balance of the Russian Federation in 2015–2023, in billions of US dollars

The deficit in the balance on external trade in services grew to $34.1 billion due to both a decline in exports and an expansion of imports of services.

Exports of services decreased by 15.3% and totaled $41.2 billion. The key reason was a decline in other services provided to non-residents, including in the segment of computer services, construction and other business services: restrictive measures against Russian suppliers imposed by unfriendly jurisdictions had an impact. At the same time, the cost of transportation for non-residents by Russian transport companies remained virtually unchanged, and the increase in the number of non-residents visiting the Russian Federation led to an increase in exports under the item “Travel”.

Imports of services rose by 6.3% to $75.3 billion. The decrease in the value of other services received from non-residents was offset by an increase in expenses of Russians during foreign visits, recorded under the item “Travel”, as well as an increase in transport services received by foreign carriers.

Composition of exports and imports of services in 2023, %

The negative balance on investment income has halved: both income accrued in favor of non-residents and income received by residents from foreign investments have decreased. The largest role was played by the negative balance of income on direct investment, including as a result of a reduction in the degree of participation of direct investment investors in domestic business, as well as a reduction in the amounts of dividends declared by Russian companies. At the same time, the surplus in the balance of income from other investments increased due to the growth of income received from abroad.

Balance on investment income by type of investment in 2015–2023, in billions of US dollars

The deficit in the balance on secondary income grew by 11.2%, including due to other transfers paid.

Balance on secondary income in 2015–2023, in billions of US dollars

The financial account balance amounted to $43.3 billion.

External liabilities of the economy decreased by $8.1 billion:

• the reduction in liabilities on direct investment was due to the repayments of liabilities on debt instruments to affiliated foreign companies, including as a part of the bond substitution mechanism;
• foreign liabilities in the form of portfolio investment decreased due to a reduction in foreign investment in Russian debt securities;
• debt on other investment increased due to a growth in debt on outstanding foreign trade settlements in the context of complicated logistics chains and as a result of rise in liabilities on accrued but not paid dividends.

Net incurrence of liabilities by residents by functional categories in 2015–2023, in billions of US dollars

The growth in financial assets in 2023 totaled $35.2 billion:

• foreign financial assets in direct investment rose mainly driven by an increase in investment in foreign equities;
• portfolio investment declined primarily due to a decrease in residents’ investments in foreign debt instruments;
• foreign claims in the form of other investment grew, among other things, due to the accumulation of residents’ funds in foreign accounts;
• reserve assets reduced mostly as a consequence of foreign currency transactions carried out on the domestic market under the fiscal rule.

Net acquisition of financial assets by residents by functional categories in 2015–2023, in billions of US dollars

International investment position of the Russian Federation

More significant decrease in foreign liabilities compared to assets led to an increase in net international investment position of the Russian Federation to $857.5 billion as of December 31, 2023 from $768.1 billion as of the end of 2022.

The total volume of foreign assets of the Russian Federation decreased by $47.6 billion and amounted to $1,554.3 billion. The key reason was negative revaluations of financial instruments and other changes associated with redomicilation.

Foreign assets of the Russian Federation, in millions of US dollars

Direct investment declined mainly due to a drop in value of foreign equity instruments under the influence of exchange rate factor and as a result of other changes caused by the transition of participants of foreign economic activity to the Russian jurisdiction.

Portfolio investments declined due to other changes associated with a decrease in investment in debt securities issued by non-residents.

Other investment, in contrast, grew due to increased claims on outstanding foreign trade settlements and accumulation of residents’ funds in foreign accounts as a year earlier.

Reserve assets increased from $582.0 billion to $598.6 billion.

Composition of foreign assets as of December 31, 2023, %

External liabilities of the Russian Federation decreased by $137.0 billion to $696.7 billion due to negative revaluations as well as other changes.

Foreign liabilities of the Russian Federation, in millions of US dollars

Direct investment in the Russian Federation declined mainly as a result of negative revaluations and deoffshorization of Russian business.

Portfolio investment reduced due to the sale of Russian debt instruments by non-residents.

The decrease in debt on other investment was mainly due to the redemption of long-term loans by residents.

Composition of foreign liabilities as of December 31, 2023, %

External debt of the Russian Federation

The external debt of the Russian Federation as of December 31, 2023 amounted to $316.8 billion, having decreased by $68.2 billion, or by 17.7%, since the end of 2022.

The reduction in the external debt was mainly due to a decline in debt of other sectors by $55.4 billion, or by 22.6%, mostly on raised loans, including within the framework of direct investment relationship. Indebtedness of general government to non-residents decreased by 29.1%, or by $13.4 billion as a result of the decrease in debt on sovereign debt securities denominated in both Russian rubles and foreign currency. At the same time, total external debt of central bank and banks remained virtually unchanged.

External debt of the Russian Federation, in billions of US dollars

In 2023 there was a decrease in external debt for financial instruments denominated both in domestic and foreign currencies. The reduction of debt in domestic currency is significantly associated with the decrease in liabilities on sovereign debt securities and negative revaluation. The reduction of debt denominated in foreign currencies mostly due to the redemption of loans raised within the framework of direct investment relationship. Due to the repayment of external debt on long-term instruments, the share of short-term debt in the total volume of external debt increased slightly.

External debt of the Russian Federation in domestic and foreign currencies, in billions of US dollars