Inflow and outflow of capital from Russia

Main article: Russian economy

2023

Forced repayment of external debt for $120 billion leads to capital outflow

In total, from January 1, 2022 to July 1, 2023, the estimated amount of repaid external debt in foreign currency amounted to $120 billion. The main reason for repayment is the impossibility of refinancing debt in the currencies of unfriendly countries due to the sanctions imposed by the United States and its allies after the outbreak of the conflict in Ukraine.

Record flight of capital physliz after the start of a special operation in Ukraine

Main article: Bank accounts of Russians abroad

After the start of the special operation of the RF Armed Forces in Ukraine, the capital outflow in April 2023 amounted to almost $160 billion and $180 billion from Q3 2021. About 40-50% was concentrated on individuals (up to 80 billion after the SVO), half of which directly, and the rest through funds, trusts and other financial organizations. There was no larger flight of individuals in the history of Russia.

2022: The outflow of capital from Russia in the 1st quarter increased 3.6 times, to $64.2 billion.

Net capital outflow in the 1 quarter of 2022 increased to $64.2 billion or 3.6 times compared to the same period in 2021.

The indicator rose above only in 2014: then the net outflow of capital from Russia for the fourth quarter amounted to $152.1 billion.

2021

Net capital outflow from Russia for the year increased by 42% to $72 billion

The outflow of capital from Russia in 2021 increased to $72 billion from $50.4 billion a year earlier, that is, 42%. The net outflow of funds of non-residents from OFZs and Eurobonds for the same year amounted to $3.2 billion against the inflow of $3.9 billion a year earlier.

The outflow of money took place with the "almost neutral influence" of banks' operations. "The decisive role was played by the acquisition of foreign assets by other sectors mainly in the form of direct investment," the Bank of Russia said.

"A significant increase in direct investments of other sectors abroad was the result, first of all, of reinvestment of income of foreign subsidiaries, as well as an increase in investments in the capital of related foreign corporations," the regulator noted.

Outflow of $59 billion in 9 months

The net outflow of private capital from Russia for the nine months of 2021 amounted to $59 billion. This is almost 50% more than in the same period last year.

Zero capital outflow for 7 years since 2014

In the post-Crimean reality, from Q2 2014 to Q2 2021, the accumulated capital withdrawal was near zero (the arrival was balanced by an outflow).

2020: $4.3 billion surge in shadow capital inflows from abroad

The Russian economy in 2020 experienced a surge in the inflow of shadow capital from abroad, follows from the statistics of the Central Bank. In January-December, $4.3 billion came to the country on operations that the central bank could not explain. They did not fall under any of the standard payment categories and were classified as "errors and omissions" of the balance of payments.

The result recorded by the central bank is the third record in the entire modern history of the country.

More "shadow capital" came to Russia only in 2014, when, against the background of sanctions, money of unexplained origin of $7.9 billion poured into Russian accounts, and in 2007, when the economy enjoyed the inflow of foreign investment and received the maximum net import of capital by the private sector since the collapse of the USSR.

In other years, as a rule, dubious operations consisted in the withdrawal of money from Russia. For example, in 2019, such an outflow amounted to $1.5 billion, in 2016 - $5 billion, in the "obese 2010s" reached $8-10 billion per year.

2019

The most popular ways to withdraw money abroad

At the end of March 2020, the Central Bank of the Russian Federation named the most popular ways to withdraw money abroad in 2019. Most often, according to the regulator, transactions with services were applied, primarily international cargo transportation, acquisition of rights to software and intellectual property (29%), advance payments for imported goods (27%) and import of goods through the countries of the Customs Union (19%).

At the same time, it is noted that suspicious cash transactions have significantly decreased. Their volumes decreased 1.9 times. The number of cashes outside the banking sector has decreased even more - more than three times.

The Central Bank of the Russian Federation named the most popular ways to withdraw money abroad

According to the Bank of Russia, at the end of 2019, the volume of operations with signs of withdrawal of money from the Russian Federation decreased by 10% and amounted to 66 billion rubles against 73 billion rubles in 2018.

The average nominal exchange rate against the dollar USA ruble in 2019, according to the data, CENTRAL BANK OF THE RUSSIAN FEDERATION amounted to 64.73 rubles/$ 1, in 2018 - 62.54 rubles/$ 1. Thus, the amount of funds withdrawn abroad in 2019 is estimated at $1.02 billion, in 2018 - about $1.17 billion.

In 2019, transit operations of increased risk aimed at non-cash compensation of cash proceeds "sold" to third parties by trading and travel companies and payment agents more than tripled.

The Bank of Russia said that the main demand for shadow financial services in 2019, as well as a year earlier, was recorded in the construction sector - it accounts for 37% of dubious operations. Also, high demand was formed in the services sector (25%) and trade (24%).

The Central Bank also published an approximate structure of high-risk transit operations that precede the cashing and withdrawal of funds abroad or contribute to tax evasion, they are often accompanied by a change in the grounds for incoming and outgoing payments, and "brittle" VAT.^[1]

Central Bank forecast - outflow of $35 billion

In March 2019, the Central Bank of the Russian Federation adjusted the forecast for capital outflow from Russia for 2019 to $35 billion from $20 billion, follows from the materials of the regulator.

The regulator also raised expectations for 2020 to $17 billion from $13 billion, in 2021 to $13 billion from $11 billion^[2].

2018: Outflow of $76 billion

In March 2019, the Bank of Russia raised its estimate of net capital outflow from the Russian Federation in 2018 to $76 billion from $67 billion.

2017: $31.3 billion (forecast $12 billion)

According to preliminary data from the Central Bank, capital outflow amounted to $5.1 billion in January-February 2017 against $4.8 billion in January-February 2016. According to the forecast of the Central Bank (March 2017), the outflow of capital will slow down in 2017 to $12 billion and will remain at this level in 2018-2019.

"As for the outflow of capital, in our opinion, it will be stable: $12-13 billion per year over a three-year period," said the head of the Central Bank Elvira Nabiullina on March 24.

According to Nabiullina, in 2017 the capital outflow will remain at a low level and will not exceed the base forecast ($13 billion).

"This will also be facilitated by a decrease in net payments of companies on external debt," the head of the Central Bank explained.

At the end of 2017, the Bank of Russia estimated the export of capital from Russia by private sector companies at $31.3 billion. At the same time, at the end of 2016, capital outflow was estimated at $19.8 billion, that is, over the past year, the figure increased by about 60%.

2016: Outflow of $19.2 billion

Capital outflow from Russia amounted to $19.2 billion in 2016, the Bank of Russia reported.

According to the Bank of Russia, the outflow of capital from the country in the period from 1994 to 2016. amounted to almost $675 billion^[3].

2015

Net capital export $56.9 billion

Net export of capital by banks and enterprises from Russia amounted to $56.9 billion in 2015, which is 2.7 times less than in 2014 ($153 billion), the Bank of Russia reports.

"Unlike previous years, the main component in the structure of net capital export was the repayment of private external debt. The most significant was the reduction of external liabilities of banks, which was carried out not only through the sale of foreign assets, but also through funds accumulated under current account transactions. Other sectors, being in harsh conditions of external financing, were also forced to pay off external debt with the minimum increase in foreign assets in recent years, mainly in the form of direct investment, "the Central Bank notes

The Central Bank also revised the data on capital movements in the third quarter of 2015: capital inflows remained, but amounted to $3.4 billion against the initial estimate of $5.3 billion. In the IV quarter of 2015, capital outflow amounted to $9.2 billion.

According to the Central Bank, the net export of capital from Russia will amount to $53 billion in 2016, $48 billion in 2017, and $46 billion in 2018.

Balance of payment surplus $65.8 billion (+ 12.7 %)

Country Balance of Payments - the ratio of cash payments coming into a country from abroad to payments abroad within a certain time (year, quarter, month).

The difference between the country's income and expenditure is the balance of payments. Balances can be positive or negative. In the latter case, there is a balance of payments deficit, that is, the country spends more abroad than it receives from outside. This may adversely affect the stability of the national currency.

There are two sections in the balance sheet: the current account and the capital account.

The current account includes:

• 1) trade balance (aggregate payments to/from the country for export and import of goods);
• 2) balance of services (trade in services, payment for foreign transportation, tourism, purchase/sale of patents and licenses, international insurance);
• 3) balance of transfers (money transfers, income from property abroad (interest, dividends, profit), payment of interest on foreign loans and loans, gratuitous assistance).

The current account balance is a measure of export from a country (NE). The balance is positive if the export exceeds the import.

In 2015, the current account surplus of the Russian balance of payments amounted to $65.8 billion, which is 12.7% more than in 2014 ($58.4 billion), the Bank of Russia reports.

"The growing current account surplus was the result of a significant decrease in the negative contribution of the balance of services and investment income, including by reducing payments for servicing external debt in the face of a decrease in the total amount of debt to non-residents," the Central Bank notes.

At the same time, the current account surplus grew in the IV quarter of 2015 by 73.3% to $13.0 billion against $7.5 billion in the III quarter.

Meanwhile, the negative balance of the financial account (without reserve assets) more than halved in 2015 to $61.1 billion against $130.2 billion in 2014. In the IV quarter of 2015, the figure was $3.1 billion against $2.4 billion in the III quarter.

2014: Outflow of $151.5 billion

Net capital outflow from Russia in 2014 amounted to $151.5 billion. In such an amount, it was estimated by the Central Bank of the Russian Federation. This is almost 2.5 times more than in 2013 ($61 billion), and even more than in the crisis year 2008 ($133.6 billion).

"A significant factor in the increase in the net export of capital by the private sector in 2014, along with the increase in foreign assets, were payments on the external debt of companies and banks in the face of narrowing opportunities for refinancing debt due to sanctions," the Central Bank writes.

At the end of 2014, the Ministry of Economic Development estimated the outflow of capital from Russia at $125 billion. Russian President Vladimir Putin gave about the same assessment. He believes that half of the money that is considered to have left Russia actually remained in the country.

From Q1 2004 to Q2 2014 (10.5 years), the accumulated output in the "other investments" category amounted to $670 billion, 80-85% of which was concentrated on banks and legal entities (mainly companies and structures related to exporters, including to optimize taxes and conceal income).

2005-2011: Structure of capital outflow and inflow to the Russian Federation

Notes