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5.2.1 ​Import/export dynamics
The EU is Ukraine’s largest trading partner, accounting for 41% of all foreign trade​ last year, Trade Representative Taras Kachka reports on Facebook. Russia and CIS countries play a diminishing role. Thanks to a near doubling of Ukraine’s exports to China last year, Ukraine now trades more with China than with the CIS countries. Ukraine’s imports from Russia fell by 35% last year, causing Russia to cede to Poland the position of Ukraine’s third largest trading partner, after China and Germany.
Turkey-Ukraine trade held to pre-pandemic levels last year, finishing around $5bn.​ If a Turkey-Ukraine free trade agreement is signed, “we will reach $10bn very quickly,” Ukraine's Ambassador to Turkey Andrii Sybiha told the Ukrainian-Turkish Chamber of Commerce and Industry last week. Despite the pandemic restrictions, about 1mn Ukrainians visited Turkey last year, compared to 1.5mn in 2019. Turkey accounted for almost 5% of Ukraine’s overall foreign trade last year.
5.2.2​ Current account dynamics
Ukraine’s current account (C/A) surplus swelled to $797mn in January
from $80mn in December, mostly due to an improved goods trade balance, the National Bank of Ukraine (NBU) preliminarily reported February 2. The January trade balance switched to the surplus of $260mn from the deficit of UAH362mn in December. The surplus of primary income enlarged to $268mn in January from $52mn in December, the surplus of secondary income declined to $269mn from $390mn.
The goods trade deficit shrank to $230mn in January from $913mn in December. Goods export declined 6.3% y/y to $3.6bn (vs. 17.7% y/y surge in December). The decline was mostly due to the 24.3% y/y drop of food exports (vs. 5.5% y/y growth in December). In addition, machinery exports dropped 3.5% y/y (vs. 3.0% y/y decline in December). At the same time, exports of mineral products jumped 50.8% y/y (vs. 98.7% surge in December), exports of ferrous metals advanced 8.2% y/y (vs. 30.5% y/y jump in December),​ ​Goods import dropped 4.2% y/y to $3.8bn in January after inching up 1.7% y/y in December. In particular, machinery imports dropped 4.3% y/y (vs. 10.5% y/y growth in December), imports of mineral products declined 2.9% y/y (vs. 31.5% y/y slide in December), foods imports decreased 4.4% y/y (vs. 9.0% y/y growth in December). At the same time, imports of chemicals advanced 5.3% y/y (after 20.6% y/y jump in December).
The financial account deficit amounted to $1.0bn in January (vs. $2.8bn surplus in December). In particular, the net outflow of the foreign currency under the trade loans amounted to $568mn. In addition, the net outflow of the foreign currency in the banking sector amounted to $235mn.
The deficit of Ukraine’s balance of payments in January amounted to $220mn (vs. a $906mn surplus in January 2020).
Ukraine’s external trade declined significantly in January. The growth in exports of mineral products and ferrous metals, driven by favorable external market conditions, didn’t compensate the fall in food exports. Import of goods
30​ UKRAINE Country Report​ March 2021 ​ ​www.intellinews.com