Russia: Exports continue to contract, although at a slower pace; oil price remains stable
July 1, 2015
In May, exports totaled USD 32.3 billion, which represented a 26.7% contraction in annual. The reading marked yet another contraction at a double-digit rate, but was less sharp than the revised 33.9% plunge registered in April (previously reported: -31.3% year-on-year). Meanwhile, imports totaled USD 15.2 billion in May, which marked a 42.0% decrease over a year ago (April: -40.8% yoy) and registered the fastest fall since August 2009.
As exports contracted less sharply and imports continue to nose dive, the trade surplus remained virtually unchanged in May. The surplus totaled USD 17.1 billion in May, which was slightly down from the USD 17.9 billion observed in the same month last year. Moreover, the accumulated trade surplus continues to shrink. In the 12 months up to May, the trade surplus recorded USD 178 billion, which was mildly below the USD179 billion recorded in the same period up to April, but well below the USD 192 billion registered in the same month last year.
The price of Russia’s main commodity export—Urals oil—has stabilized around USD 60 per barrel in recent weeks. At the end of June, the price for Urals oil traded at USD 60.3, which was only 3.4% lower than the USD 62.4 per barrel registered at the end of May. In annual terms, the price of Urals oil, however, is still low. At USD 60.3 per barrel at the end of June, it is 44.9% lower than the end of June last year.
The Russian Central Bank published its assessment of the country’s economic outlook, where it sees two scenarios. Under a baseline scenario, the Bank expects the price for Urals oil to average USD 80. Under a worst-case scenario, the Bank sees oil prices averaging USD 60.
Author: Ricardo Aceves, Senior Economist