Page 32 - UKRRptNov20

National Bank of Ukraine has cut its total grain and legume harvest estimate for 2020 to 67 million tons, down 11% from last year’s 75 million tons.
5.2.2​ Current account dynamics
Ukraine’s current account (C/A) reached a $370mn surplus in August, compared to a $147mn deficit in July​, the National Bank of Ukraine (NBU) preliminarily reported on September 30. The trade deficit shrunk to $77mn from $586mn in July. The goods trade deficit shrank to $0.5bn from $1.0bn in August. The primary income account reached a $178mn surplus (vs. a 129mn surplus in July), while the secondary income account surplus amounted to $851mn (vs. a 269mn surplus in July).
In 8M20, the current account surplus amounted to $4.2bn (vs. a $3.7bn deficit in 8M19).
Goods imports slid 17.8% y/y to $4.3bn in August, compared to a 21.2% y/y plunge in July. The decline was mostly due to a 44.3% y/y drop in mineral product imports (vs. a 44.5% y/y fall in July) and a decline of machinery imports of 12.7% y/y (vs. 16.8% y/y in July). Meanwhile, food imports jumped 21.2% y/y (vs. a 15.1% y/y growth in July). In 8M20, goods imports dropped 17.1% y/y.
The decline in goods exports slowed to 2.0% y/y to $3.9bn in August from a drop of 15.4% y/y in July. In particular, food exports advanced 3.1% y/y (vs. a 16.1% y/y decline in July), while machinery exports surged 15.2% y/y (vs. a 10.5% y/y fall in July). The decline of ferrous metals exports slowed to 7.0% y/y (vs. a 23.3% y/y drop in July). Meanwhile, exports of mineral products plummeted 20.3% y/y (vs. a 21.4% y/y drop in July). In 8M20, goods exports declined 6.7% y/y.
The financial account was almost balanced with a $19mn deficit in August (vs. a $58mn surplus in July). In particular, the net outflow from the public sector of $272mn was compensated by the net inflow to the private sector of $253mn.
Ukraine’s balance of payments switched to a $353mn surplus in August from a $88mn deficit in July. In 8M20, the surplus of the balance of payments amounted to $1.5bn (vs. a $2.1bn surplus in 8M19).
Evgeniya Akhtyrko: These figures fulfill our expectations about the current account balancing out. Goods exports showed some positive dynanics in August, but their sustainability for the near term cannot be assured as the pandemic situation might change very fast.
Goods imports remain weak because of falling imports of energy resources and investment goods. Meanwhile, food imports have been picking up fast amid relatively strong private consumption.
We do not expect dramatic changes in current trends in Ukraine’s external accounts in the upcoming months. The current account is likely to remain balancing out.
32​ UKRAINE Country Report​ November 2020 ​ ​www.intellinews.com