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Ukraine May goods trade deficit reaches USD 1.3 bln, almost doubling yoy

Ukraine's trade deficit in goods reached USD 1.3 bln compared to USD 0.8 bln a year ago, the State Statistics Service reported on July 14. Goods exports slowed to 25.9% yoy growth in 5M17 from 26.8% yoy in 4M17. They were led by minerals (65% yoy growth), food (41% yoy), food oils (31% yoy), metals (26% yoy), grains (23% yoy), and machinery (16% yoy). Import growth sped up to 28.6% yoy in 5M17 from 24.3% yoy in 4M on the back of energy (70% yoy growth), vehicles (56% yoy), metals (31% yoy), machinery (28% yoy) and chemicals (12% yoy).

In 5M17, non-energy imports sped up to 19.1% yoy growth from 15.4% yoy in 4M17. Exports to CIS countries slowed to 29.8% yoy growth (33.2% yoy for 4M17) while exports to the EU sped up to 25.2% yoy growth (21.4% yoy for 4M17).

Alexander Paraschiy: Ukraine's trade deficit is expanding confidently, a trend that will continue for at least the next year, unfortunately. Provisional customs statistics reveal the trade deficit has already reached USD 2.1 bln in June from USD 0.7 bln a year ago. In 2H17, the pattern of fast expansion of imports amid slowing export growth is unlikely to change. 

Against this backdrop, our initial forecast for a USD 4.4 bln trade deficit (according to UkrStat methodology) might turn out to be overly optimistic for 2017. But for the moment, we are keeping it unchanged.

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