Current account deficit shrinks to 7.7% of GDP in 1H08

According to the preliminary data from the National Bank of Ukraine published yesterday, the current account deficit narrowed to 7.7% of GDP (USD 6.7 bln) in 1H08, from 9.8% in 1Q08. The overall balance of payments ran a surplus of USD 2.3 bln, helped by foreign investment inflow (USD 5.1 bln). Andrii Parkhomenko: As we forecasted, the current account deficit began to narrow over the last three months, which we attribute to high prices for exported commodities, mainly steel. We still believe that in the second half of the year, the shortfall will continue to shrink and reach 4.5% of estimated GDP. Strong FDI, which we expect to hit USD 11.4 bln, will help keep the balance of payments in positive territory.