Ukraine current account reaches minor surplus in August
1 October 2015
Ukraine’s current account (C/A) balance reached a USD 60 mln surplus in August compared to a USD 103 mln deficit a year ago, the National Bank of Ukraine (NBU) reported on Sept. 30. The C/A surplus was almost at the same level of USD 78 mln in July. The main factor was nearly equal declines in exports (-25.4% yoy) and imports (-25.6% yoy). Goods exports fell 28.0% yoy due to minerals (-52% yoy), metals (-36% yoy) and food (-14% yoy). Imports slid 27.2% yoy on the back of food (-42% yoy), chemicals (-21% yoy), energy (-20% yoy) and machinery (-18% yoy).
Ukraine’s curent account was in deficit of USD 133 mln in 8M15 (vs. a deficit of USD 2,346 mln in 8M14), NBU reported.
Ukraine’s financial accounts strengthened to a USD 444 mln surplus in August compared to a USD 57 mln surplus a year ago (and USD 317 mln surplus in the prior month). Strengthened FDI inflow (USD 642 mln compared to USD 149 mln in the prior month), a loan from the World Bank (USD 500 mln) as well as foreign currency returning to the banking system (USD 291 mln compared to USD 93 mln in July) were the key factors behind the improved financial flow. The general balance in August was reported at a USD 513 mln surplus. Coupled with a USD 1.65 bln wire from the IMF, the general balance surplus boosted gross international reserves to USD 12.6 bln, which is nearly 3.2 months of imports.
Alexander Paraschiy: The August statistics are slightly better than we expected. Still, we do not see cause for further optimism. Imports were lower than projected primarily due to halted natural gas imports from Russia. At the same time, we observed a slowdown in non-energy imports decline: -26.9% yoy in August compared to -36.8% yoy in July. We attribute that to the effect of the stabilized hryvnia.
What’s more, the National Bank revised its previous C/A estimate for 7M15: now instead of a surplus of USD 88 mln, the NBU has reported a USD 193 mln deficit for the period.
We are keeping our initial forecast of a USD 2.2 bln deficit (2.4% of GDP) in 2015 and project a USD 3.7 bln C/A deficit (3.9% of GDP) in 2016.
