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the regulator said in a statement. "As a result, food exports decreased by 3.3% y/y in May."
However, thanks to external prices remaining favourable and the growth in production of certain chemical products, the exports of metallurgical (30.2% y/y) and chemical (49.2% y/y) industries grew rapidly. In general, exports of goods rose by 11.8% y/y over five months of 2018 and amounted to $17.8bn.
Imports of goods reached $4.6bn in May. Compared with May 2017, imports increased by 15.5% on the back of higher energy prices and a sustainable domestic demand growth.
Due to the rise in global oil prices, the import value rose by 42.3% y/y for oil products and by 8.4% y/y for natural gas. High domestic demand fuelled imports of mechanical engineering products by 17.8% y/y.
Net financial account inflows amounted to $307mn in May (compared with $339mn in May 2017) and were generated by the private sector (both banks and real sector). "As the state was making repayments on hryvnia domestic government bonds held by non-residents and repayments of loans, the net outflows from public sector operations reached $113,m," the NBU underlined.
Foreign direct investments (FDI) amounted to $719mn in January-May. FDI remained at the level of previous months ($150mn) in May alone, but over half of their total volume was channelled to the banking sector via debt-to-equity transactions.
Net financial account inflows totalled $701mn in January-May. In May alone, the balance of payments recorded a surplus of $66mn. At the same time, due to payments to the IMF, international reserves decreased by 1.6% to $18.2bn as of early June, covering 3.2 months of future imports.
5.2 Balance of payments, current account
Ukraine’s current account (C/A) deficit widened to $125mn in June, from $27mn in the previous month, owing to significant deterioration in the services balance, the National Bank of Ukraine (NBU) reported in its provisional balance of payments on July 30. In 1H18, the C/A deficit amounted to $613mn vs. $285mn in 1H17.
The trade deficit enlarged to $822mn in June (from $771mn in May) as the surplus in trade in services dropped to $1mn in June from $156mn in May. In particular, exports of services declined 5.5% m/m, while imports increased 7.1% m/m.
Goods imports plunged to 9.9% y/y growth in June from 16.1% y/y growth in May. The slowdown of imports was mostly due to declining chemicals (-1.9% y/y in June vs. 10.7% y/y growth in May) and a flat trend in machinery (-0.1% y/y in June vs. 17.7% y/y growth in May). Meanwhile, mineral product imports accelerated to 32.6% y/y growth (from 15.2% y/y in May) due to fast renewal of energy imports.
Goods exports slowed to 11.5% y/y growth , from 13.5% y/y in May, mostly due to chemicals (22.6% y/y growth in June vs. 49.2% y/y in May) and
30 UKRAINE Country Report August 2018 www.intellinews.com