Current Account Deficit Reaches 4.2% of GDP in 2007

According to the balance of payments for 2007 released by the National Bank of Ukraine, the current account deficit was USD 5.9 bln or 4.2% of GDP (vs. our forecast of USD 6.3 bln). Eased slightly by a surplus in trade in services, the overall trade deficit was USD 7.9 bln or 5.6% of GDP. Net FDI reached USD 9.2 bln, in line with our forecast of USD 9.0 bln for last year. The NBU’s net FDI figure is USD 1.4 bln higher than that reported by the State Statistics Committee as the two authorities’ calculation methods and data sources differ. Ukraine’s financial account exceeded its current account by a wide margin, resulting in strong growth in FX reserves by USD 10.2 bln to USD 32.5 bln in 2007. In other news, the State Statistics Committee reported that in January the merchandise trade deficit reached USD 865 mln (7.6% of GDP).