Trade balance on goods reaches USD 106 mln surplus for January-February

The trade balance on goods for 2M15 improved to USD 106.7 mln surplus vs. USD 302.6 mln deficit a year ago, according to Ukrstat report on April 14.  Exports have declined 33.7% yoy while imports plunged 37.0% yoy.  For the first two months of the year exports have decreased due to a slump in vehicles exports (-72.6% yoy), as well as a plunge in mineral products (-57.2% yoy), and a decline in metals (-38.9% yoy) and machinery (-38.9% yoy). Also adding fuel was the contraction in foodstuff exports (-13.3% yoy).  Imports have declined on the back of vehicle imports slump (-62.6% yoy), falling machinery (-39.4% yoy), sliding chemical imports (-28.6% yoy) and decreasing mineral products (-24.7% yoy).  Throughout January-February non-energy imports fell 41.4% yoy.  For the reported period exports to CIS countries fell 56.7% yoy and to EU by 33.3% yoy.

Alexander Paraschiy:  Trade balance is improving on the back of a more than 40% hryvnia decline in February.  Given that in March we did not observe any foreign currency volatility and the hryvnia even strengthened to USD 23/UAH from USD 27/UAH, we should see external trade statistics improving over the upcoming months.  We keep projecting exports falling near 28% in 2015 with imports sliding near 30% in what should translate into USD 0.6 bln trade surplus for 2015 (according to UkrStat methodology).  Deeper contraction in imports (as we observed in 2M15) will translate into stronger external balance results.