Ukraine goods trade deficit shrinks to USD 0.9 bln in August

Ukraine’s goods trade deficit reached USD 0.89 bln in
August, shrinking from USD 1.2 bln in July, the State Statistics Service said
in its preliminary report on Oct. 15. The seasonally adjusted goods trade
deficit amounted to USD 0.85 bln (shrinking from a USD 0.96 bln deficit in
July) amid a 2.7% m/m decline in adjusted exports and 4.2% m/m decrease in
adjusted imports.

In August, goods exports increased 6.2% yoy to USD 4.3
bln (vs. a 18.3% surge in July). In particular, grain exports jumped 30.6% yoy
(vs. a 60.3% yoy surge in July). In addition, mineral product exports increased
33.1% yoy (vs. 34.4% yoy growth in July). At the same time, export of ferrous
metals dropped 14.6% yoy (vs. 2.0% yoy growth in July). In addition, machinery
exports slid 5.6% yoy (vs. a 16.7% yoy surge in July).

Goods imports amounted to USD 5.2 bln, slowing to 6.1%
yoy growth in August (vs. 8.3% yoy growth in July). As in previous months, the
growth was mostly driven by machinery, road vehicles and aircraft. In
particular, machinery imports advanced 21.8% yoy (vs. 26.5% yoy growth in July)
while imports of road vehicles and aircraft increased 26.3% yoy (vs. 57.9% yoy
growth in July). Meanwhile, energy product imports continued to fall, dropping
11.6% yoy (vs. a 17.4% yoy decline in July).

In 8M19, the merchandise trade deficit reached USD 5.8
bln, swelling 16.7% yoy. Goods exports advanced 6.9% yoy to USD 33.0 bln.
Meanwhile, goods imports rose 8.2% yoy to USD 38.9 bln.

Exports to the EU increased 7.5% yoy in 8M19, while EU
imports advanced 8.6% yoy. The share of the EU in Ukraine’s exports and imports
amounted to 42.3% and 41.6%, respectively.

Evgeniya Akhtyrko: The August
merchandise balance was close to our prediction.
We were also right in predicting weaker growth of grain exports and
irregularity in machinery and ferrous metal exports. 

The provisional customs statistics released this month
promise that September’s goods trade deficit will enlarge to around USD 1 bln,
mostly due to the lower value of exports.

We expect the 2019 goods trade deficit (according to
UkrStat methodology) to swell to USD 11.5 bln (from USD 9.9 bln in 2018), with
import growth outpacing export gains.