Macroeconomic Forecast Russia

May 2006 | Macroeconomic Forecasts

We have adjusted our current account forecasts this month, after the release of Q106 balance of payments data by the central bank. These show buoyant merchandise exports growth of 27% y-o-y continuing to outpace import growth of 21.6%, driving the overall current account surplus up to US$28bn from just over US$20bn in the first quarter of 2005. As in the past, the main factor pushing the surplus upwards was the price of oil. With existing oil capacity constraints on both the production and export front compounded by this year's record low winter temperatures, it was a more than 35% y-o-y rise in the average price of Urals crude in Q1 that drove oil exports in value terms by 46% y-o-y. We are somewhat constrained by BMI's current oil price outlook for the next two years, which sees the price of Urals rising by around 10% in 2006 to US$55.33/bbl from US$50.40/bbl in 2005, before easing to US$49.62/bbl in 2007. These forecasts now clearly have an upside bias, however, justifying an increase in our export projections for both 2006 and 2007. This in turn has lifted our current account surplus forecasts to the equivalent of 9.6% and 6.6% of GDP respectively, from 8.5% and 5.9% previously.

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