Page 34 - UKRRptJun19

payments reflected a Deutsche Bank loan for €529mn attracted by the government on February 28 under a guarantee of the World Bank. The net currency inflow under the trade credits amounted to $301mn (vs. the net inflow of $420mn in February).
In March, the balance of payments switched to a $652mn surplus (from a $248mn deficit in February). In 1Q19, the balance of payments surplus amounted to $336mn (vs. a $272mn deficit in the first quarter of 2018).
The contracting goods trade deficit is not likely to be a sustainable trend.
We expect goods imports to pick up as Ukraine’s needs in imported mineral products (namely, oil and gas) are not likely to decline this year. In addition, high investment demand will boost the imports of machinery.
At the same time, the current growth of goods exports is being driven by surging agricultural exports after a record-high grain harvest last season, and this factor will fade away in 2H19. Meanwhile, other important export items like ferrous metals are not likely to demonstrate a confident growth trend in the nearest future.
Concorde CApital expects the C/A deficit to enlarge to $5.5bn in 2019 (vs. $4.5bn in 2018) due to the growing trade deficit.
34 UKRAINE Country Report June 2019 www.intellinews.com