Page 38 - UKRRptJul20

5.2​ Balance of payments
Ukraine’s goods trade balance switched to a $418mn surplus in April
from a $579mn deficit in the prior month, the State Statistics Service said in its preliminary report published on June 15.
The seasonally adjusted goods trade surplus amounted to $169mn (vs. a $505mn deficit in March) amid 0.7% m/m growth in adjusted exports and a 14.4% m/m decline in adjusted imports.
Goods exports slid 6.2% y/y in April to $3.8bn (vs. a 4.2% y/y drop in March). The decline was mostly driven by falling exports of ferrous metals (-17.6% y/y) and machinery (-22.6% y/y). At the same time, exports of food oils and fats surged 43.5% y/y, exports of mineral products grew 8.5% y/y, and grain exports climbed 4.0% y/y.
Goods imports plummeted 27.4% y/y to $3.4bn in April (vs. a 4.0% y/y drop in March). In particular, imports of energy products plunged 40.9% y/y, machinery imports decreased 29.1% y/y, and imports of vehicles and aircraft fell 39.9% y/y.
In 4M20, the goods trade deficit amounted to $0.7bn (vs. $2.1bn in 4M19). Goods exports slid 1.7% y/y, while goods imports dropped 9.3% y/y.
“These results meet our expectations of a deeper decline both in ​goods exports and imports in April​. However, the consequences of the worldwide corona crisis and quarantine restrictions were more devastating for Ukraine’s imports than for exports. And this resulted in a significant improvement in Ukraine’s goods trade balance. It was also positive to see that some important items of Ukraine’s exports managed to show growth during perhaps the bleakest month of the pandemic,” Evgeniya Akhtyrko of Concorde Capital said in a note.
“May’s statistics are likely to show further drops in both goods exports and imports. But as in April, the imports decline is likely to be deeper than the fall in exports, which might result in further improvement of Ukraine’s trade balance.”
Olena Bilan, Dragon Capital’s chief economist says:: "Our agricultural exports now account for 40% of total exports​. In 2008-2009, it was only 12%. That strongly supports the inflow of foreign exchange earnings.”
With the cost of imported oil and gas falling by 51% y/y in May, the trend of falling imports continues​. Through May, imports are down 13% y/y, to $18.3bn, reports Ukraine’s Customs Service. For consumers, prices of gasoline and diesel were down 27-28% in May y/y, reports the State Statistics Service.
For goods, the foreign trade deficit dropped in half during the first four months y/y​, from $3.3bn last year, to $1.5bn this year. For services, the surplus more than doubled – from $626mn last year, to $1.4bn this year.
38​ UKRAINE Country Report​ July 2020 ​ ​www.intellinews.com