Ukraine C/A deficit surges to USD 1.7 bln in September

Ukraine’s current account (C/A) deficit amounted to
USD 1.7 bln in September, the highest since December 2013, the National Bank of
Ukraine (NBU) reported on Oct. 31. It surged from USD 0.6 bln in the previous
month, owing to an enlarged trade deficit and the primary account balance
switching to deficit from surplus. In 9M18, the C/A deficit amounted to USD 3.9
bln (vs. USD 1.5 bln in 9M17). 

 

The trade deficit jumped to USD 1.8 bln in September
(from USD 1.2 bln in August) as goods exports declined 3.6% yoy (vs. 11.0% yoy
growth in August). In particular, exports of raw and finished food products
plummeted 9.8% yoy (vs. 6.5% growth in August). In addition, exports of mineral
products declined 9.2% yoy (vs. 28.0% growth in August). The exports of metals
slowed to 8.3% yoy growth (from 11.1% yoy growth in August).

 

Meanwhile, goods imports increased 17.3% yoy in
September, keeping almost the same growth rate as in August. Mineral products
exports grew to 24.9% yoy growth (from 16.7% yoy growth in August), while machinery
products exports picked up 22.6% yoy (vs. 20.4% yoy in August).

 

In 9M18, goods imports rose 15.6% yoy, while exports
grew 9.9% yoy.

 

The primary account balance switched to a USD 224 mln
deficit in September from a USD 244 mln surplus in August due to a coupon
payment on international Eurobonds of USD 711 mln during the month.

 

Ukraine’s financial account surplus enlarged to USD
1.1 bln in September (from USD 661 mln in the prior month), mainly because of
increased inflow under trade credits (USD 897 net mln inflow in September vs.
USD 170 mln net outflow in August).

 

In September, the C/A deficit surpassed the surplus of
the financial and capital account, bringing Ukraine’s balance of payments to a
deficit of USD 584 mln – the largest since March 2016. In 9M18, the deficit of
balance of payments amounted to USD 418 mln (vs. a surplus of USD 1.9 bln in
9M17).

 

Evgeniya Akhtyrko: The decline
of export receipts amid fast growing imports increased devaluation pressure on
Ukraine’s ForEx, resulting in 2.5% devaluation of the hryvnia during September.
The hryvnia’s continuing devaluation should suppress import growth and slow
down the C/A deficit’s swelling through the year end. Meanwhile, we don’t see
much opportunities for boosted exports.

 

We are revising our 2018 C/A projections in order to
account for recent developments in the external sector.