Ukraine's current account almost flat in May

Ukraine's current account almost flat in May
Ukraine's current account (C/A) balance had an insignificant deficit of $41mn in May / bne IntelliNews
By bne IntelliNews July 2, 2018

Ukraine's current account (C/A) balance had an insignificant deficit of $41mn in May, being almost balanced for the second month in a row after a $193mn surplus in April, according to the state statistics agency.

In 5M18, the C/A deficit amounted to $415mn (vs. $308mn in 5M17). The trade deficit's May enlargement by 21% m/m was almost fully compensated by growth in primary and secondary income (58% m/m and 15% m/m, respectively).

The trade deficit enlarged to $786mn in May (from $356mn in April) mostly due to goods imports. In particular, a 13% rise in mineral product imports was behind renewed growth in energy imports. Machinery (18% y/y) and chemicals (11% y/y) were other important contributors to import growth. Overall, goods import growth decelerated to 16% y/y in May from 18% y/y in April.

Goods export growth decelerated to 13% y/y in May from 20% y/y in April, mostly due to less food exports (-3.3% y/y). Meanwhile, strong growth in metals (30% y/y) and chemicals (49%) exports restrained the trade deficit.

The surplus of Ukraine’s financial and capital increased to $304mn in May (from $101mn in the prior month), mainly because of an inflow of trade credits ($399mn of net inflow in May vs. $80mn of net outflow in April). The surplus of Ukraine’s combined balance of payments reached $266mn (vs. $357mn a year ago). In 5M18, the balance of payments surplus amounted to $284mn.

“The deceleration in goods exports in May was expected given the high comparative base of the same month last year, when the jump in food exports of 30% y/y drove goods export growth to 22% y/y. That said, we expect goods exports to accelerate in June amid a high growth rate of metals and chemicals. At the same time, goods imports are not likely to cool significantly amid restored growth of energy imports,” Evgeniya Akhtyrko of Concorde Capital said in a note.

“We expect the trade deficit to swell $10.8bn through the end of the year (from $2.9bn in 5M18), assuming an almost even growth pace between exports (we project 11.3% y/y in 2018) and imports (11.5% y/y in 2018). Our forecast is for a 2018 C/A deficit of $2.4bn (vs. a $2.1bn deficit in 2017),” she adds.

 

Data

Dismiss