Ukraine current account deficit reaches $4.5bn in Jan-Nov

By bne IntelliNews January 5, 2015

In November, Ukraine’s current account deficit declined to $414mn from $515mn in October and from $1.1bn in November 2013, according to a National Bank of Ukraine (NBU). The reduced deficit was caused by a somewhat stronger imports decline (-33.7% y/y) compared to a bit slower exports contraction (-30.4% y/y) in November.

Merchandise imports declined mostly due to falling energy imports (-33.7% y/y), mainly oil. Other declines occurred in food (-42.3% y/y), machinery (-37.1% y/y), and chemicals (-30.6% y/y). Merchandise exports fell on the back of mineral products (-42.1% y/y), machinery (-31.9% y/y), metals (-29.3% y/y), and food (-20.1% y/y). In January-November, the CA deficit reached $4.5bn, down 3.3-fold y/y ($14.7bn in January-November 2013).

Financial and capital accounts were reported to be running $2.2bn deficits in November compared to a $3.0mn deficit in October ($0.5bn surplus in November 2013). External redemptions to Gazprom on gas debt ($1.45bn), as well as a reduced level of private debt rollover (to 82% from 87% in October), were the main reasons for the high monthly deficit. FDI still remains positive ($0.08bn) in November and foreign currency withdrawal from the banking system stopped as the central bank reported $0.03bn inflow for the first time since June. The general balance was seen at a $2.6bn deficit in November, which transformed into a 20.6% gross international reserves decline to $10.0bn as of end-November (1.9 months of future imports).

Concorde Capital expert Alexander Paraschiy said that exports fell much faster in November than was expected, due to the worsening economic situation. This trend is the main reason why Concorde Capital is once more revising its C/A deficit estimate for 2014, which was anticipated to reach $4.5bn (3.4% of GDP) by the end of December. The new estimate is $5bn in the 2014 C/A deficit (4.0% of GDP).

For 2015, Concorde Capital forecasts the C/A deficit narrowing on the back of further weakening of the hryvnia, which has already declined to near 18-19 UAH/$ from nearly 16 UAH/$ in November. What's more, parliament approved new taxes on imports (5-10%) for 2015 which will add extra pressure in the next 12 months, he added. At the same time, Paraschiy expects the declining rates of exports to slow down to near -12.0% y/y in 2015 vs. -19.5% y/y expected in 2014. Stabilized exports of services is the main reason for such expectations, while commodity exports will keep falling at the same rates, given the aggravated situation in the Russian market and the region as a whole, he summed up.

Related Articles

20,000 people evacuated as "sabotaged" munitions store burns in Ukraine

About 20,000 people have been evacuated following explosions at Ukraine's largest arms depot in Balakliya near the eastern city of Kharkiv after what was claimed to be an act of sabotage. The base ... more

Ex-Trump aide Manafort reported to be long-term Putin lobbyist

Paul Manafort, US President Donald Trump's former election campaign manager, struck a covert deal with Kremlin-affiliated Russian oligarch Oleg Deripaska in 2006 to promote the interests of President ... more

Almaty cost of living lowest among major cities

Kazakhstan’s largest city and business centre Almaty has dropped to last place on the Economist Intelligence Unit’s bi-annual ranking of the ... more

Register here to continue reading this article and 2 more for free or purchase 12 months full website access including the bne Magazine for just $119/year.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

To continue viewing our content you need to complete the registration process.

Please look for an email that was sent to with the subject line "Confirmation bne IntelliNews access". This email will have instructions on how to complete registration process. Please check in your "Junk" folder in case this communication was misdirected in your email system.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

If you have any questions please contact us at sales@intellinews.com

Subscribe to bne IntelliNews website and magazine

Subscribe to bne IntelliNews website and monthly magazine, the leading source of business, economic and financial news and commentary in emerging markets.

Your subscription includes:
  • Full access to the bne content daily news and features on the website
  • Newsletters direct to your mailbox
  • Print and digital subscription to the monthly bne magazine
  • Digital subscription to the weekly bne newspaper

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

bne IntelliNews
$119 per year

All prices are in US dollars net of applicable taxes.

If you have any questions please contact us at sales@intellinews.com

Register for free to read bne IntelliNews Magazine. You'll receive a free digital subscription.

Already a subscriber or registered - click here to recover access.

If you a IntelliNews Pro user - click here to login.

Thank you. Please complete your registration by confirming your email address.
A confirmation email has been sent to the email address you provided.

IntelliNews Pro offers daily news updates delivered to your inbox and in-depth data reports.
Get the emerging markets newswire that financial professionals trust.

"No day starts for my team without IntelliNews Pro" — UBS

Thank-you for requesting an IntelliNews Pro trial. Our team will be in contact with you shortly.

Dismiss