Ukraine trade deficit improves on gas import delay in June

Ukraine’s merchandise trade balance improved to a USD 526 mln deficit in June 2013 (versus USD 1.5 bln a year ago), according to state statistics released on August 14. Exports declined 12.4% yoy while imports fell 23.6% yoy in June. On a m/m basis, trade dipped into the red from a USD 172 mln surplus in May.

In 1H13, the merchandise trade deficit decreased USD 3.0 bln yoy to USD 4.21 bln, mostly caused by a USD 2.40 bln yoy drop in gas imports.

Alexander Paraschiy: A decline in energy imports (-56.1% yoy) was the key reason for the improved trade balance in June. Delayed natural gas imports shaved off USD 1.3 bln from imports compared to the same year-ago month, which is what led to the USD 1.0 bln yoy trade deficit decrease.

It’s worth noting the government significantly adjusted its trade data for the first five months of the year. In 5M13, the state reported a USD 2.4 deficit, while in 6M13 it widened to USD 4.2 bln, or USD 1.3 bln more than the June monthly figure.

It’s possible the government is playing numbers that paint an unfavorable portrait of the economy. So we will not be surprised if another USD 1.0 bln in deficit for June will be displayed in later statistics.

We are keeping our forecast for the merchandise trade deficit at USD 13.5 bln (UkrStat methodology) in 2013 in light of delayed gas imports and dubious trade statistics reporting.