Research & Insights #43

Russia’s export revenues down sharply in 2023

According to the Bank of Russia, the country’s export revenues fell by around 30% in 2023. This drop is due in particular to the fall in crude oil prices. Export revenues amounted to US$ 422.7 billion in 2023, compared with US$ 592.1 billion in 2022, which was itself a record year. At the same time, the country’s imports, in monetary terms, amounted to US$ 304.4 billion in 2023, up 10% on the previous year. They have returned to the levels recorded in 2021, before the start of the war in Ukraine. As a result, the trade surplus in 2023 amounted to US$ 50.2 billion, compared with US$ 238 billion the previous year. In December, the Deputy Prime Minister said that Russia’s energy sector contributed “around 27% to gross domestic product (GDP)”. He added that oil and gas revenues accounted for “nearly 57% of our country’s total export earnings”.

Russian exporters will continue to support the rouble in 2024

On 23 January, the Russian government announced that it was in favour of extending the measures relating to the compulsory sale of foreign exchange earnings. Since October 2023, the government has required 43 Russian business groups to convert at least 80% of all foreign currency received as part of their export contracts to combat the weakening rouble. This measure has become an important tool in maintaining the country’s macroeconomic stability. Because of Western sanctions, the Central Bank of Russia cannot use its reserves in euros and dollars to reduce exchange rate volatility. A stable and predictable exchange rate is an essential condition for developing the Russian economy, increasing foreign trade and attracting investment, according to the Center for Strategic Developments.

Russia is preparing to ban Britain from fishing in the Barents Sea

The Russian government wants to withdraw from a Soviet-era fishing agreement allowing British vessels to operate in the Barents Sea. The 1956 Fisheries Agreement was concluded as part of a concerted diplomatic effort to ease post-war tensions with the West. It allowed British ships to fish along the coast of the Russian Kola Peninsula, east of Cape Kanin Nos, off the island of Kolguev and the small islands of the Barents Sea. This area runs along the northern coasts of Norway and Russia. The need to denounce the agreement is a response to the termination of the most favored nation (MFN) trade status for Russia by the United Kingdom in March 2022, the Russian Cabinet said earlier.

Sberbank announces record profits of US$ 17 billion in 2023

Russia’s largest bank, Sberbank, posted a record net profit of US$ 16.87 billion in 2023, five times more than in 2022 when Western sanctions hit the Russian financial sector. The bank was one of the first Russian companies to be sanctioned, resulting in its complete withdrawal from the European market and a fall in profits of almost 80%. Last year, the company, which is majority-owned by the Russian state, launched operations in Crimea, having avoided doing so for years due to the threat of Western sanctions. Sberbank has more than 100 million customers in Russia and several former Soviet republics. It stands out for its investments in artificial intelligence, cloud services, big data and intelligent devices.

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