Ukraine C/A surplus reaches USD 0.7 bln in May

Ukraine’s current
account (C/A) surplus amounted to USD 723 mln in May, rising from USD 443 mln
(revised from a previously reported surplus of USD 837 mln) in the prior month
mostly due to an enlarged trade surplus, the National Bank of Ukraine (NBU)
preliminarily reported on June 30. The goods trade balance switched to a
surplus of USD 164 mln from a USD 154 mln deficit in April, while the surplus
of trade in services declined to USD 376 mln from USD 461 mln in April. The
deficit of the primary income balance shrank to USD 140 mln, from USD 180 mln
(revised from the previously reported surplus of USD 197 mln) in the prior month.
The surplus of the secondary income amounted to USD 323 mln, staying almost
flat m/m.

 

In 5M21, the C/A
surplus amounted to USD 0.1 bln (vs. a USD 4.0 bln surplus in 5M20).

 

Goods exports surged
62% yoy (vs. 36% yoy growth in April) to USD 5.2 bln, renewing the previous
month’s record-high since 2014. The growth was mostly driven by a surge in
exports of mineral products (188% yoy) and ferrous metals (95% yoy). In
addition, food exports jumped 29% yoy, exports of chemicals jumped 57% yoy,
machinery exports advanced 30% yoy.

 

Goods imports surged
53% yoy to USD 5.0 bln in May (vs. 52% yoy growth in April). In particular,
imports of machinery jumped 50% yoy, chemical imports surged 69% yoy, imports
of mineral products advanced 39% yoy. Imports of foods added 39% yoy.

 

The financial
account switched to the deficit of USD 1.0 bln from a surplus of USD 0.3 bln in
April. In particular, the net outflow from the banking sector was USD 587 mln
(vs. USD 216 mln in April), the net outflow under the trading loans amounted to
USD 408 mln (vs. USD 71 mln in April).

 

The deficit of
Ukraine’s balance of payments amounted to USD 280 mln in April (vs. a USD 795
mln surplus in April).

 

In 5M21, the deficit
of Ukraine’s balance of payments amounted to USD 446 mln (vs. a surplus of USD
224 mln in 5M20).

 

Evgeniya Akhtyrko: The boom in Ukraine’s external
trade continues. The export receipts are ballooning amid an incredibly
favorable global price situation for iron ore and ferrous metals. The growth of
Ukraine’s other export items is also strong, and this is not only the result of
the low comparative base of the previous year. Goods imports in money terms in
May were lower than the local maximum reached in March.

 

The NBU made
significant revisions to the C/A of previous months. According to the new data,
the C/A deficit in March grew to USD 974 mln from the previously reported USD
333 mln. In addition, the C/A surplus in April was revised to USD 445 mln from
previously reported surplus of USD 837 mln. Previously reported surpluses of
C/A in January and February were shaved off as well. The revisions were mostly
related to investment income under the primary account balance. As a result,
the C/A for 4M21 switched to a deficit of USD 0.6 bln instead of the previously
reported surplus of USD 1.1 bln.

 

Given such a
significant statistical revision, our forecast of C/A surplus of USD 0.5 bln
for 2021 now looks less easy to achieve. However, if external trade remains in
its current balance, this forecast will remain relevant.