Page 28 - UKRRptOct19

$740mn) and foreign direct investment (the net inflow of $294mn).
The surplus of Ukraine’s balance of payments amounted to $130mn in August (vs. $1.3bn in July). In 8M19, the balance of payments surplus amounted to $2.2bn (vs. a $0.16bn surplus in 8M18).
“The high volume of agricultural exports and weak energy imports helped to keep the C/A deficit in moderation. However, we expect this export growth to slow through the year end owing to the high comparative base of the previous year. At the same time, the appreciation of the national currency might further fuel imports, especially among consumer goods,” Evgeniya Akhtyrko of Concorde Capital said in a note. “We project the C/A deficit to grow to $5.4bn in 2019 (vs. $4.3bn in 2018) due to the widening trade deficit.”
Ukraine’s merchandise trade deficit reached $1.2bn in July​, increasing from $1.1bn in June, the nation's state statistics service Ukrstat said in its preliminary report on September 13.
The seasonally adjusted goods trade deficit amounted to $1bn (shrinking from a $1.1bn deficit in June) amid a 5.7% month-on-month increase in adjusted exports and 1.8% m/m growth in adjusted imports.
In July, goods exports surged 18.3% year-on-year to $4.3bn (vs. a 5.9% y/y decline in June). In particular, grain exports jumped 60.3% y/y growth (from 6.1% y/y growth in June). In addition, mineral product exports increased 34.4% y/y (vs. 20.3% y/y growth in June).
On top of that, machinery exports advanced 16.7% y/y (vs. a 19.7% y/y decline in June) while ferrous metal exports inched up 2.0% y/y (vs. 24.0% y/y drop in June).
Merchandise imports amounted to $5.5bn, accelerating to 8.3% y/y growth in July (vs. 4.1% y/y growth in June). As in June, the growth was mostly driven by machinery, road vehicles and aircraft. In particular, machinery imports accelerated to 26.5% y/y growth (from 17% y/y growth in June) while imports of road vehicles and aircraft sped up to 57.9% y/y growth (from 36.1% y/y in June).
Meanwhile, energy product imports continued to decline, dropping 17.4% y/y (vs. a 16% y/y decline in June).
In January-July, the trade deficit reached $4.9bn, enlarging 18.5% y/y. In January-July, goods exports advanced 7% y/y to $28.7bn. Meanwhile, goods imports rose 8.5% y/y to $33.7bn.
Evgeniya Akhtyrko at Kyiv-based brokerage Concorde Capital believes that the situation with external trade in goods improved significantly in July due to a sharp advance in goods exports.
"However, we don’t expect this improvement in goods exports to remain consistent through the year end. Grain export growth will be weaker due to the high comparative base of the previous year. Meanwhile, machinery exports are highly inconsistent from month to month. The growth in metal exports is a positive sign, but it’s not clear if it will remain consistent," she added in a note on September 16.
28​ UKRAINE Country Report​ October 2019 ​ ​www.intellinews.com