VTB: Russia's non-CIS imports add modestly in December
January 16, 2013
The Russian Federal Customs reported that the growth in non-CIS imports in December slid to 1.7% YoY (0.4% MoM SA), from 1.9% YoY in November, bringing absolute volumes to USD 25.2bn. The growth of non-volatile components decreased to 1.5% YoY (USD 23.0bn) from 1.6% YoY in the previous month; imports of investment goods added a mere 1.4% YoY (USD 13.7bn) vs. 3.4% YoY in November. Importantly, car import growth rebounded to 2.1% YoY, from a decline of 8.2% YoY a month ago. Furthermore, the annual increase in volatile items (ships, planes, etc.) decelerated to 3.0% YoY (USD 2.1bn) from the 4.9% YoY in the previous month.
December's customs report on imports reflects a continuing moderation of import growth, which stabilised at low levels towards the end of last year. The deceleration in the annual growth of the headline reading can be explained by a slowdown in both the volatile and non-volatile items (though the latter was a greater drag in December).
In detail, it is positive that the MoM SA growth in non-volatile imports recovered strongly to 1.1% last month, reaching an 8-month high. This improvement was partly due to a bounce back in the import of cars. We treat this as a one-off move and not a reverse in the downwards underlying trend so far. From the trade balance perspective, slower imports implies a wider surplus in December and, as import growth is likely to be subdued over the coming months (on the back of anticipated poor expansion of internal demand amid fiscal and lending constraints), it would be supportive for the trade surplus and RUB in 1Q13.
Daria Isakova, Maxim Oreshkin
VTB Capital analysts