In 2020, we forecast the current account surplus to increase again to about +5% of GDP owing to three reasons: (i) We expect the average global oil price to edge up to 66 USD/bbl as a result of increased instability in the Middle East. (ii) Russia’s exports should benefit from strengthening global trade growth in 2020, notably in USD terms (+2.6% vs. -1.9% in 2019). (iii) Oil output cuts agreed with OPEC+ will possibly be relaxed gradually in H2 2020. 

The impact of foreign sanctions on financial flows to and from Russia has moderated. Private-sector net capital outflows from Russia moderated to just  -USD27bn in 2019, down from -USD63bn in 2018 and well below the record highs in 2014 and 2008. The annual average over the last 10 years was -USD58bn (see Figure 1). This favorable development suggests that the impact of foreign sanctions on financial flows to and from Russia has declined. In 2020, we expect a similar amount of net capital outflows of around -USD30bn for the Russian private sector.