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Ukraine C/A switches to surplus of USD 0.1 bln in October

Ukraine C/A switches to surplus of USD 0.1 bln in October

1 December 2021

Ukraine’s current account (C/A) switched to a surplus
of USD 117 mln in October from a deficit of USD 522 mln in the prior month
mostly due to an improved balance of the primary account, the National Bank of
Ukraine (NBU) reported on Nov. 30. The goods trade deficit enlarged to USD 609
mln from USD 238 mln in September, while the surplus of trade in services
enlarged to USD 306 mln from USD 192 mln. The primary account balance switched
to the surplus of USD 23 mln from a deficit of USD 752 mln in the prior month.
At the same time, the surplus of the secondary account declined to USD 397 mln
from USD 468 mln in September.

 

In 10M21 the C/A deficit amounted to USD 1.3 bln (vs.
a USD 5.1 bln surplus in 10M20).

 

Goods exports increased 39% yoy in October (vs. 59%
yoy growth in September) to USD 5.9 bln. The growth was mostly driven by a
surge in exports of ferrous metals (81% yoy) and food exports (43% yoy). At the
same time, exports of mineral products slid to 2.0% yoy and machinery exports
declined 12% yoy.

 

Goods imports increased 36% yoy to USD 6.5 bln in
October (vs. 44% yoy growth in September). In particular, imports of mineral
products surged 2.4 times, chemical imports advanced 39% yoy. In addition,
imports of machinery advanced 16% yoy. Food imports picked up 9%.

 

The financial account switched to a surplus of USD 1.0
bln in October from a deficit of USD 1.7 bln in the prior month. In particular,
the net inflow under the operations of the government sector amounted to USD
386 mln. The net inflow from foreign direct investment is assessed at USD 291
mln, including income reinvestment of USD 114 mln. In addition, the net foreign
currency inflow from the banking sector amounted to USD 340 mln, and the inflow
under trade credits amounted to USD 250 mln.

 

The surplus of Ukraine’s balance of payments amounted
to USD 1.1 bln in October (vs. a USD 2.2 bln deficit in September).

 

In 10M21, the deficit of Ukraine’s balance of payments
amounted to USD 0.3 bln (vs. a deficit of USD 0.8 bln in 10M20).

 

Evgeniya Akhtyrko: Exports of
mineral products are not among the drivers of exports growth anymore as the
global boom of prices for iron ore is over. Meanwhile, the high growth of
metals exports continues, and food exports are surging amid the abundant supply
of the new season’s crop. 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 around USD 1 bln in 2021 (vs. a USD 5.2 bln
surplus in 2020).

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