Key events in EMEA next week

Russia will report its 3Q21 balance of payments, which we believe will include a very strong current account surplus of $32b on strong fuel and non-fuel proceeds amid still restrained imports of services (outward foreign tourism). The current account surplus was enough to cover the $12.8b in mandatory FX purchases, and we expect a similar situation for 4Q21. The capital account is a more problematic issue. On the one hand, the government enjoyed net portfolio inflows of $5.7b into local currency public debt (OFZ), but on the other, the private sector saw substantial net outflows. The upcoming data release will help to shed light on whether this was technical or systemic.

In other news, the Finance Ministry will report its Federal budget fulfilment for the first nine months of 2021, which we believe to be in RUB1.1t surplus, ahead of the seasonal year-end spending splurge, which should lead to a small deficit for the full year, according to our expectations. As a reminder, the recently released budget draft is guiding for a sharp consolidation in 2022, which bodes ill for GDP growth next year. But we believe the actual fulfilment could be less stringent in the event of a weaker ruble, higher than expected CPI, and if household income trends disappoint.