Russian President Vladimir Putin. picture alliance/dpa | Karl Josef Hildenbrand
Russia’s current account surplus fell by 85 percent from January to July 2023 compared to the previous year.
That surplus hit a record high in 2022 as oil and gas exports boomed amid war in Ukraine.
Now, however, those energy exports have plummeted — and Russia is struggling to keep up its energy trade.
This is a machine translation of an article by our US colleagues at Insider. It was automatically translated and checked by a real editor. We welcome feedback at the end of the article.
Russia’s economy is struggling to keep growing due to the war with Ukraine Data The central bank showed on Wednesday that the January-July current account surplus fell 85 percent year-on-year.
The current account, which measures the total flow of money into and out of a country for trade and investment, rose to $165.4 billion in the six months ended July 2022. A surplus means that a country’s production exceeds its demand for goods.
When Russia launched its attack on Ukraine in February last year, the country kept its oil and gas exports flowing, so foreign payments continued to fill the treasury. However, those energy revenues have since plummeted, down 41 percent compared to the first seven months of 2023.
The latest data show that Russia’s current account balance is now in surplus at $25.2 billion, reflecting the heavy toll the war and Western sanctions have taken on the economy.
Extrapolated for the year, however, the value has increased slightly compared to the previous six months. At first glance, this may seem surprising, because in 2022 Russia achieved record numbers. So how can the current numbers be higher in comparison? The explanation: In the second half of 2022, the current account fell massively. If you extrapolate these numbers for a full year and do the same for the first six months of 2023, you now get an increase.
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The government press release noted that Russia’s trade surplus fell 68.4 percent year-on-year, leading to a decline in current account numbers. The trade balance makes a significant contribution to a country’s current account balance. The central bank pointed to a decline in the total volume of exports and a fall in world market prices for Russia’s main raw materials compared to last year.
Big discounts when exporting Russian oil
Although the US and other Western partners avoid trading with Russia, China and India have emerged as major buyers of Russian oil. However, the high discounts and the long transport routes meant that these sales could not bring about a significant economic upswing.
Moscow has taken a relatively optimistic stance on the war and the country’s economy, but data such as retail sales, flight activity and car sales point to a much more bleak picture.
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