Ukraine C/A switches to deficit of USD 0.5 bln in September

Ukraine’s current account (C/A) switched to a deficit
of USD 492 mln in September from a surplus of USD 189 mln in the prior month
mostly due to a deteriorated trade balance and the primary account, the
National Bank of Ukraine (NBU) preliminarily reported on Oct. 29. The goods
trade deficit enlarged to USD 415 mln from USD 181 mln in August, the surplus
of trade in services slid to USD 238 mln from USD 248 mln. The deficit of the
primary account enlarged to USD 793 mln from USD 266 mln in August mostly due
to coupon payments on state Eurobonds
for USD 446 mln during the month. At the same time, the surplus of the
secondary account increased to USD 478 mln from USD 388 mln in August.

 

In 9M21 the C/A deficit amounted to USD 1.4 bln (vs. a
USD 4.6 bln surplus in 9M20).

 

Goods exports surged 59% yoy in September (vs. 53% yoy
growth in August) to USD 6.0 bln. The growth was mostly driven by a surge in
exports of ferrous metals (2.3x yoy). In addition, food exports accelerated to
59% yoy growth (vs. 26% yoy in August). At the same time, exports of mineral
products slowed to 28% yoy growth (vs. 2.2x yoy in August).

 

Goods imports growth accelerated 44% yoy to USD 6.4
bln in September (vs. 42% yoy growth in August). In particular, imports of
mineral products surged 2.5 times, chemical imports advanced 49% yoy. In
addition, imports of machinery advanced 18% yoy and imports of foods jumped 22%
yoy.

 

The financial account switched to a deficit of USD 1.8
bln in September from being in balance in the prior month. In particular, the
net outflow under the operations of the government sector amounted to USD 2.0
bln related to the redemption of international Eurobonds. The net inflow from
foreign direct investment is assessed at USD 685 mln, including income
reinvestment of USD 609 mln. At the same time, the net foreign currency inflow
from the banking sector amounted to USD 71 mln, while the outflow under trade
credits amounted to USD 73 mln.

 

The deficit of Ukraine’s balance of payments amounted
to USD 2.2 bln in September (vs. a USD 126 mln surplus in August).

 

In 9M21, the deficit of Ukraine’s balance of payments
amounted to USD 2.2 bln (vs. a deficit of USD 0.5 bln in 9M20).

 

Evgeniya Akhtyrko: Abundant
exports of agricultural produce from the new season’s crop gave an additional
impetus to the goods export growth in September, offsetting the weakened growth
in exports of mineral products caused by  the deteriorated prices for iron
ore. The high pace of the growth of goods imports is mostly prompted by growing
prices for energy resources.

 

High goods exports are likely to last through the
end of the year, maintained by accelerated agricultural exports. We expect
Ukraine’s C/A deficit to land at USD 1 bln in 2021 (vs. a USD 5.2 bln surplus
in 2020).