Ukraine goods trade deficit surges 4x m/m in May

Ukraine’s goods trade deficit increased four times to
USD 621.8 mln in May from USD 149.0 mln in April, the State Statistics Service
stated in its July 16 preliminary report. Meanwhile, the seasonally adjusted
goods trade deficit jumped 65.8% m/m, as seasonally adjusted imports increased
13.4%, while exports grew 5.8% m/m.

In 5M18, the trade deficit reached USD 2.1 bln, or a
44% yoy surge. Imports increased 15.3% yoy, outpacing exports, which grew 12.9%
yoy. Goods imports were driven by machinery (22.7% yoy), chemicals (15.1% yoy),
and metals (21.9% yoy). Meanwhile, energy imports picked up 4% yoy in 5M18 from
1% yoy in 4M18.

Export growth continues to be driven by metals (31.1%
yoy growth in 5M18), machinery (21.0% yoy), and timber (43.0% yoy). Meanwhile,
exports of oils and crops dropped 6.0% yoy and 2.2% yoy, respectively.

Exports to EU countries grew 21.3% yoy in 5M18,
outpacing import growth of 13.4% yoy.

Evgeniya Akhtyrko: As we predicted, imports of
goods picked up in May amid higher energy imports. The 5M18 goods trade deficit
of USD 2.1 bln was a bit higher than our estimate of USD 1.9 bln.

The provisional customs statistics indicate that the
trade deficit will enlarge by USD 0.6 bln in June, thus bringing the 1H18
indicator to USD 2.7 bln, which is about 40% higher than a year ago. Our
current projection for the 2018 goods trade deficit (according to UkrStat
methodology) is USD 7.0 bln (vs. USD 6.3 bln in 2017).