1Q06 Negative Trade Balance Widens To USD 1.77 Bln.

During 1Q06 export of goods decreased by 4.4% yoy to USD 7.99 bln while imports grew by 30.2% yoy reaching USD 9.76 bln. Concorde Capital: Ukraine’s dependency on imported gas and oil along and exports centered around steel have always been considered as the major risks for the Ukrainian economy. Both factors are in play simultaneously now: the slowdown in global steel markets (Ukraine’s steel exports dropped by 7.7% yoy in 1Q06) and end of cheap gas imports (imports of fuels grew by 31.2% yoy). As a result we expect the negative trade balance to widen to ~USD 7 bln (6% of GDP).