Page 25 - UKRRptJuly18

President Poroshenko and Prime Minister Groysman, two politicians who grew up near Moldova, Ukraine and Moldova are liberalizing air and highway transport and starting joint border crossings at many points.
Ukraine’s foreign trade deficit grows 1.5 fold in January-April 2018 y/y,
reaching $1.423bn ($968.6mn in January-April 2017), the State Statistics Service reports. In April, the deficit was $221.6mn, while in March – $460mn, in February – $457mn and in January – $284.1mn. In January-April 2018, exports of goods grew by 12.8% y/y, to $15.457bn, and imports – by 15.1%, to $16.88bn. In April 2018 compared with the previous month seasonally adjusted volumes of exports fell by 3.6% and imports – by 1%. The seasonally adjusted deficit of foreign trade in April 2018 was $577.7mn, in March it was $473.9mn, in February 2018 – $352.9mn and in January – $519.9mn. As a result, the coefficient of coverage of imports by exports was 0.92 (in January-April 2017 some 0.93).
A 66% jump in metal sales in April turned Ukraine’s trade deficit into a surplus. April sales hit $1bn, the highest level since August 2014, when Kyiv started to lose economic control over much of the Donbas. During the first four months of the year, ferrous metals exports grew by almost one third, year over year, to $3.5bn. Ferrous metals accounted for 23% of Ukraine’s overall exports, up from 19% during the same period last year. Writing before the US steel tariff started Friday, Concorde Capital’s Evgeniya Akhtyrko said: “The jump in metal export sales came as a very good surprise.”
5.2 Balance of payments, current account
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
25 UKRAINE Country Report July 2018 www.intellinews.com