Experts of the Gaidar Institute on growth in Russian exports in March

In March, exports of goods from the Russian Federation increased by 30%–40% as compared to the first few months of 2024, reaching the maximum level since December 2022. This comes from the assessment of the balance of payments for March and Q1 2024 presented by the Central Bank of Russia.

Alexander Firanchuk drew attention to the fact that when comparing exports month-to-month, calendar and seasonal factors should be taken into account. If we compare March 2024 with the levels seen in 2023, we can conclude that export dynamics are generally stable ($39.6 bn versus $40.9 bn a year earlier), the expert noted.

The Russian government banned exports of gasoline for six months from March 1, but the dynamics of rising prices for crude oil and an increase in oil shipments fully compensate for this, Dmitry Kuznetsov noted. “Restrictions on Russian exports have more or less stabilized and have not undergone significant changes since the beginning of 2023,” the expert said.

Statistics based on the balance of payments methodology reflect the transfer of ownership of goods from residents to non-residents, that is, how much funds are to be paid under the contract, and not the actual sum which was credited to the account, explained Alexander Firanchuk. Dmitry Kuznetsov added that customs statistics in this sense are not very different: they do not reflect the actual movement of funds. The expert shows it using the example of Russian oil exports to India: according to India’s data, Russian crude oil supplies amounted to almost $45 bn in 2023, but the actual flow of funds to Russia was rather complicated.

In March, the exchange rate of the US dollar to the ruble was relatively stable and fluctuated in the range of Rb91–Rb93 per $1. “A lack of the exchange rate’s response to trade surplus growth in March is the evidence that this excess currency did not appear on the Russian foreign exchange market,” believes Dmitry Kuznetsov. Large exporters are now obliged to sell foreign currency earnings, the expert reminds, and an increase in the supply of foreign currency amid decreasing imports would have led to the appreciation of the ruble. Owing to problems related with payments for imports, goods under a number of contracts are not actually imported to Russia and therefore are not reflected in the statistics, the expert added. While Russian goods can be exported before payment is received (and then reflected in statistics), a similar approach is not possible in case of imports. “Most likely, goods are sent to Russia only after payment has been received by the supplier, and since payment is difficult to receive and almost impossible in respect of some goods, the flow of goods to Russia is decreasing,” says Dmitry Kuznetsov.

The US continues to put pressure on neutral countries, including China and Turkey, Firanchuk notes. “It is important to understand that the Russian market is secondary for China (less than 4% of its exports) and other neutral countries. A loss of access to major Western markets and the financial infrastructure is an unjustifiably high risk for companies from these countries,” the expert said.

Russia is pursuing a tight monetary policy: the key rate is equal to 16%. However, when problems with payments are solved, the effect of deferred demand may arise in future, “but it is premature to talk about this now,” notes Dmitry Kuznetsov.