Ukraine C/A surplus reaches USD 1.4 bln in May

The surplus of Ukraine’s current account (C/A) reached
USD 1.4 bln in May, declining from a USD 1.9 bln surplus in April, the National
Bank of Ukraine (NBU) reported on June 30. The trade balance surplus reached
USD 373 mln in May (vs. a USD 930 mln surplus in April) with the goods trade
balance switching to an insignificant deficit of USD 122 mln (vs. a 273 mln
surplus in April). The primary income account reached a USD 495 mln surplus
(vs. a 557 mln surplus in April), while the secondary income account surplus
amounted to USD 266 mln (vs. a 244 mln surplus in April). In 5M20, the current
account surplus amounted to USD 5.6 bln (vs. a USD 1.1 bln deficit in 5M19).

Good imports plunged 35.5% yoy to USD 3.3 bln in May,
accelerating from a 29.8% yoy decline in April. In particular, the decline in
imports of mineral products accelerated to 53.7% yoy (from a 39.7% yoy decline
in April). Imports of chemicals dropped 33.3% yoy (vs. a 17.9% yoy decline in
April). In 5M20, goods imports dropped 16.5% yoy.

The decline in goods exports accelerated 24.7% yoy to
USD 3.1 bln in May from a drop of 3.8% yoy in April. In particular, the decline
of metals exports deepened to 32.1% yoy (vs. 18.1% yoy in April). Food exports
switched to a 13.4% yoy fall from 6.6% yoy growth in April. Exports of mineral
products plummeted 35.2% yoy (vs. 12.1% yoy growth in April). In 5M20, goods
exports declined 6.1% yoy.

The financial account deficit swelled to USD 1.7 bln
in May from USD 1.2 bln in April. The net outflow from the state budget of USD
1.3 bln was the result of repayments in Eurobonds (USD 1 bln) and the net sale
of local bonds by non-residents (USD 0.3 bln). In addition, the net outflow on
foreign direct investment amounted to USD 323 mln (vs. an inflow of USD 360 mln
in April).

In May, Ukraine’s balance of payments switched to a
USD 353 mln deficit from a USD 716 bln surplus in April. In 5M20, the surplus
of the balance of payments amounted to USD 224 mln (vs. a USD 466 mln deficit
in 5M19).

Evgeniya Akhtyrko: As we expected, the decline
in imports outpaced the exports decline in May. However, the plunge in goods
exports was severe amid depressed global demand from the corona crisis.

Ukraine’s external trade will remain sluggish in June,
but we are likely to see less severe declines both in imports and exports, as
the bleakest period of the corona crisis seems to be over for Ukraine’s major
trading partners. Meanwhile, we do not see factors that would result in
Ukraine’s C/A switching to a deficit in the nearest months.