C/A deficit reaches 9.6% of GDP in 1Q08

Ukraine’s current account deficit widened to 9.6% of GDP or USD 3.6 bln in 1Q08, up from 7.9% of GDP in 4Q07, according to the National Bank of Ukraine’s balance of payments. The external trade deficit grew to 10.8% of GDP, mostly on increasing imports of machinery products and the rise in commodity prices. The financial account surplus totaled 9.7% of GDP and fully covered the C/A shortfall, although by a very narrow margin. Net FDI, however, was a USD 2.4 bln in 1Q08 (compared to USD 9.2 bln in 2007). Andrii Parkhomenko: Strong FDI growth in 1Q demonstrates that investors with a long-term horizon remain positive on the Ukrainian economy.