Russia: Russia's trade surplus shrinks strikingly to five-year low in August
September 30, 2015
Russia’s trade surplus narrowed to USD 8.5 billion in August, which came in dramatically below the USD 16.2 billion registered in the same month last year. August’s trade surplus, which was the lowest in five years, continued to reflect the free fall that Russian exports have registered over the course of this year. Due to the narrow surplus observed in August, the accumulated trade surplus in the 12 months up to August was USD 161 billion. Russia’s trade surplus is dangerously approaching the levels seen in mid-2011.
Exports totaled USD 25.0 billion in August, which represented an astonishing 39.7% contraction over the USD 41.5 billion tallied in the same month last year. The contraction is the 10th consecutive at a double-digit rate and followed a 40.2% plunge in July. Meanwhile, imports registered USD 16.5 billion in August, which was below the USD 25.3 billion observed in August 2014, representing a 34.7% annual decrease (July: -41.9 % year-on-year).
Following a period of heightened volatility, oil prices have stabilized in recent weeks. The price of Urals oil—Russia’s key commodity export—closed at USD 45.9 per barrel on 30 September. Oil prices hit a low on 24 August, when the price of the commodity closed the trading day at USD 40.8 per barrel. The price plunge reflected the market turbulence created by tumbling stock markets in China, which spread globally and hurt most emerging markets. That said, the mild recovery observed in recent days is the result of the improvement seen in recent economic data in China. Markets have also been tracking developments in Syria, where Russia launched its first airstrikes at the beginning of October. The intervention adds to the uncertainty in the Middle East, which is the world’s largest oil producing region. In addition, U.S. oil supply continues to show signs of a gradual decline.
Author: Ricardo Aceves, Senior Economist