Ukraine goods trade deficit narrows to USD 0.9 bln in November

Ukraine’s goods trade deficit narrowed 39.2% m/m to USD
0.88 bln in November (from USD 1.44 bln in October), the State Statistics
Service stated in its preliminary report on Jan. 14. The seasonally adjusted
goods trade deficit declined 20.6% m/m amid 4.7% m/m growth of adjusted exports
and a 1.1% m/m decline of adjusted imports.

In 11M18, the trade deficit reached USD 8.9 bln, or a
67% yoy surge. Imports advanced 16.7% yoy, outpacing exports, which grew 9.9%
yoy. The major contributors to import growth were machinery (22% yoy growth in
11M18), energy (17% yoy growth), and metals (21% yoy). Export growth continued
to be driven by ferrous metals (17% yoy growth in 11M18), grains (9% yoy), and
machinery (12% yoy).

Exports to the EU grew 15.7% yoy in 11M18, outpacing
EU import growth of 12.4% yoy. The share of the EU in Ukraine’s exports and
imports amounted to 42.6% and 40.6%, respectively.

Evgeniya Akhtyrko: The 11M18
goods trade deficit coincided with our forecast.
The provisional customs statistics indicate that the trade deficit will be
around USD 1 bln in December. The ever-swelling trade deficit creates
devaluation pressure on the national currency, which depreciated 2.2% in 2018.

We expect the 2019 goods trade deficit (according
to UkrStat methodology) will enlarge to USD 11.5 bln, with import growth
outpacing export increases.