Ukraine goods trade deficit surges 8x yoy in January

Ukraine’s goods trade deficit reached USD 284.1 mln in
January, surging eight times yoy, the State Statistics Service reported on
March 16. Goods import growth accelerated 31.4% yoy, outpacing export growth
of  23.5% yoy. Seasonally adjusted goods exports increased 8.0% m/m while
imports grew 5.5% m/m, allowing the trade deficit to decline 7.9% m/m.

Chemicals, machinery and vehicles were responsible for
half of the import growth in January. Specifically, imports of chemicals surged
50%, machinery rose 30% yoy and vehicles grew 36% yoy. Meanwhile, the role of
energy imports, which increased 16% yoy, diminished in whole goods import
growth. Recall, energy was the major contributor to import growth
in 2017.

Export growth was mostly due to metals (35% yoy growth
in January), machinery (46% yoy) and mineral products (28% yoy).  

Export growth to EU countries (43.4% yoy) outpaced the
growth of imports (37.8% yoy). Meanwhile, import growth from CIS countries of
25.5% yoy outpaced export growth of 17.1% yoy.

Evgeniya Akhtyrko: January’s
swelling of the goods trade deficit was in line with our forecast. The
provisional customs statistics for 2M18 promise deceleration in both goods
imports and exports, resulting in a trade deficit of USD 0.9 bln, which is
about two times higher than in Jauary-Feburary last year.

This trend fits to our forecast of a USD 7.0 bln
goods trade deficit (according to UkrStat methodology) in 2018. The growing
trade deficit, amid bumpy currency inflow under the financial account, will
keep the Ukrainian hryvnia under devaluation pressure during the year.