Russia’s Cash Inflow Gains Momentum
Russia’s cash inflow is on the rise again as oil exports recover. The country’s current account surplus, which measures the difference between exports and imports, has grown to $37.2 billion in the first nine months of 2023, up from $30.3 billion in the same period last year.
Oil Exports Rebound
The rebound in oil exports is the main driver of the increase in Russia’s current account surplus. Oil and gas exports account for more than half of Russia’s total exports, and the country is the world’s second-largest exporter of crude oil.
In the first nine months of 2023, Russia’s oil and gas exports rose by 8.3 percent compared to the same period last year. This was driven by higher oil prices, which rose by more than 20 percent in the first nine months of 2023 compared to the same period last year.
Stronger Ruble
The increase in Russia’s current account surplus has also been supported by a stronger ruble. The currency has appreciated by more than 10 percent against the U.S. dollar since the start of 2023, making Russian exports more competitive.
The stronger ruble has also helped to reduce the cost of imports, which have fallen by 4.3 percent in the first nine months of 2023 compared to the same period last year. This has helped to reduce the country’s trade deficit, which has fallen to $14.3 billion in the first nine months of 2023, down from $17.3 billion in the same period last year.
Rising Inflation
Despite the increase in Russia’s current account surplus, the country is still facing economic challenges. Inflation has been rising steadily since the start of 2023, reaching a five-year high of 6.2 percent in October.
The rising inflation has been driven by higher food prices, which have been rising due to a combination of factors, including a weaker ruble, higher global commodity prices, and a drought in some parts of the country.
Economic Recovery
The Russian economy is expected to continue to recover in the coming months, supported by higher oil prices and a stronger ruble. The government is also taking steps to reduce inflation, including raising interest rates and introducing measures to reduce the cost of food.
The government is also investing in infrastructure projects to boost economic growth. These include the construction of new roads, railways, and airports, as well as the modernization of existing infrastructure.
Outlook
Overall, the outlook for the Russian economy is positive. The increase in the current account surplus is a sign that the country is on the path to recovery, and the government’s efforts to reduce inflation and invest in infrastructure should help to support economic growth in the coming years.