By Elena Fabrichnaya and Alexander Marrow
MOSCOW (Reuters) -Lower export volumes saw Russia’s current account surplus shrink 58.2% to $8 billion in January, the central bank said on Thursday, squeezing Russia’s capital buffers at a time when Moscow is ramping up budget spending.
Russia’s current account surplus hit a record high in 2022, as a fall in imports and robust oil and gas exports kept foreign money flowing in despite Western efforts to isolate the Russian economy over the conflict in Ukraine.
But Moscow is now contending with sharply lower export revenues, down 35.1% year-on-year in January, in part due to price caps and embargoes on Russian oil and gas products.
“The significant reduction in the surplus of the balance of goods and services as a result of the decrease in the cost volume of exports of goods played a decisive role,” the central bank said.
Energy revenues were particularly low in January, down 46.4%. The slumping revenues combined with soaring expenditure to push Russia’s federal budget to a deficit of 1.76 trillion roubles ($24.2 billion) in the first month of the year.
The current account, a measure of the difference between all money coming into a country through trade, investment and transfers, and what flows back out, had stood at $19.1 billion in January 2021.
Higher commodity prices throughout 2022 helped push the current account last year to $227.4 billion, up 86% from 2021, the central bank said last month.
A slow recovery in imports in the second half of the year, combined with the drop in the value of exports, seen starkly in the lower price for Russia’s Urals blend, has put pressure on the rouble, which slid to its weakest since late April on Thursday.
Russia’s 2023 budget is based on a Urals price of $70.10 per barrel, but its average price in January was $49.48 a barrel, down 42% on January 2022.
Russia has stopped disclosing net capital outflow data.
“The surplus in the financial account of the balance of payments was formed by a decrease in liabilities to non-residents and growth in the Russian economy’s foreign assets,” the central bank said on Thursday, without providing figures.
($1 = 72.7425 roubles)
(Reporting by Elena Fabrichnaya; Writing by Alexander Marrow; Editing by Gareth Jones and Hugh Lawson)