Ukraine external goods trade deficit shrinks to USD 0.3 bln in August

Ukraine’s external goods trade deficit shrank to USD
267 mln in August from USD 817 mln in the prior month, the State Statistics
Service said in its preliminary report published on Oct. 15. The seasonally
adjusted goods trade deficit amounted to USD 394 mln (vs. a USD 517 mln deficit
in July) amid 5.0% m/m growth in adjusted exports and a 1.6% m/m increase in
adjusted imports.

Goods exports slid 1.6% yoy in August to USD 4.2 bln
(vs. a 13.0% yoy drop in July). The decline was mostly driven by falling exports
of ferrous metals (-7.5% yoy) and mineral products (-20.7%) yoy. At the same
time, grain exports advanced 13.4% yoy and machinery exports improved 14.0%
yoy.

Goods imports fell 14.3% yoy to USD 4.5 bln in August
(vs. a 17.3% yoy decline in July). In particular, imports of energy products
plummeted 47.0% yoy, machinery dropped 19.6% yoy, and chemical imports slid
9.9% yoy. At the same time, imports of foods advanced 18.3% yoy.

In 8M20, the goods trade deficit amounted to USD 2.4
bln (vs. USD 5.9 bln in 8M19). Goods exports slid 6.6% yoy, while goods imports
dropped 14.6% yoy.

Evgeniya Akhtyrko: Our
expectations proved correct that the decline in Ukraine’s exports will
decelerate through the year end due to a better performance of grain
exports. Meanwhile, machinery exports are very inconsistent,
and a strong advance in one month might change to a plunge in the next one.

Goods imports remain largely lethargic. The relatively
strong demand for consumer goods (food) is not enough to counteract low imports
of energy products and low demand for investment goods (machinery).

We don’t expect that the situation in Ukraine’s
external goods trade will change significantly through the end of the year.
Imports will show a two-digit decline year-on-year, while the improvement in
exports will mostly depend on the situation at the global grain market.