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Russia’s current-account balance has collapsed, marking another blow to the floundering economy.
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Surplus tanked 93% to $5.4 billion last quarter from a year before, according to the Bank of Russia.
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That comes as Western sanctions continue to squeeze Russia’s oil and gas exports.
Russia’s economic woes are worsening, with the latest blow coming from a collapse in its current account.
The nation posted a current-account surplus of $5.4 billion for the April-June quarter, which marks a 93% plunge from a record $76.7 billion in the same period last year, Bank of Russia data shows. That’s also the smallest excess since the third quarter of 2020.
It shows the heavy blow that Western economic sanctions — imposed on the Kremlin in response to its war on Ukraine — have dealt to the country’s economy by squeezing its energy exports.
The worsening trade dynamics are also reflected in the plunging fortunes of the ruble. The Russian currency tumbled to a 15-month low of about 94.48 for each dollar earlier in July, hit hard by the country’s weakening terms of trade.
“The decline in the surplus of the balance of the external trade in goods in January — June 2023 compared to the comparable period of 2022 was caused by a decrease in both the physical volumes of export deliveries and the deterioration in the price situation for the basic Russian export commodities, energy commodities made the most significant contribution to the decline in the value of exports,” the Bank of Russia said.
Moscow’s key source of revenue is through sales of its oil and gas products, but price caps and bans imposed on Russia’s energy exports following its unprecedented attack on Ukraine have dealt a huge hit to its commodities business.
In June, Russia’s Finance Ministry said that revenue from oil and gas taxes fell 36% compared to a year ago to about 570.7 billion rubles and that profits from crude and petroleum products tumbled 31% to 425.7 billion rubles.
Market commentators have weighed in on Russia’s battered economy, with Yale researchers accusing President Vladimir Putin of cannibalizing the nation’s economy in his mission to seize Ukraine.
Read the original article on Business Insider