Ukraine goods trade deficit reaches USD 0.5 bln in May

Ukraine’s goods trade deficit reached USD 525 mln in
May, decreasing from USD 610 mln in April, the State Statistics Service said in
its preliminary report on July 15. The seasonally adjusted goods trade deficit
amounted to USD 890 mln (staying close to the USD 900 mln deficit of April)
amid 5.4% m/m growth in adjusted exports and a 4.3% m/m increase in adjusted
imports.

In 5M19, the trade deficit reached USD 2.6 bln,
enlarging 27.4% yoy. In 5M19, goods exports advanced 7.4% yoy to USD 20.9 bln. Meanwhile,
goods imports rose 9.3% yoy to USD 23.5 bln. The agricultural sector remained
the major contributor to export growth. In particular, grain exports surged
48.0% yoy and finished food product exports picked up 13.9% yoy. In addition,
exports of mineral products increased 17.5% yoy. At the same time, exports of
ferrous metals and machinery declined 8.3% yoy and 6.5% yoy, respectively.

Road vehicle and aircraft imports surged 36.9% yoy in
5M19, and remain a major contributor to rising imports overall. In addition,
machinery imports rose 6.9% yoy, while imports of mineral fertilizers gained
39.4% yoy.

Exports to the EU grew 7.0% yoy in 5M19, while EU
imports increased 10.8% yoy. The share of the EU in Ukraine’s exports and
imports amounted to 41.9% and 42.0%, respectively.

Evgeniya Akhtyrko: The trade
deficit declined in May due to accelerated growth of exports. However, the
continuing decline in exports of ferrous metals and machinery restrains export
growth.

The provisional customs statistics released this month
promise that June’s goods trade deficit will enlarge to USD 0.8 bln.

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.