Ukraine goods trade deficit falls 40% m/m in August

Ukraine’s goods trade deficit amounted to USD 848 mln,
falling 40% m/m from USD 1,419 mln in July, the State Statistics Service stated
in its preliminary report on Oct. 16. The seasonally adjusted goods trade
deficit declined 32.6% m/m amid an adjusted export increase of 4.7% m/m and
adjusted import decline of 4.4% m/m.

In 8M18, the trade deficit reached USD 5.0 bln, or a
45.7% yoy surge. Imports advanced 16.1% yoy, outpacing exports, which grew
12.4% yoy. The major contributors to import growth were machinery (19.0% yoy),
energy (14.3% yoy), and chemicals (10.9% yoy). In addition, food imports picked
up 26.6% yoy, expanding their role in the import structure.

Export growth continues to be driven by ferrous metals
(25.7% yoy growth in 8M18), machinery (19.0% yoy), and timber (30.0% yoy).

Exports to the EU grew 18.3% yoy in 8M18, outpacing
import growth of 13.4% yoy. The share of the EU in Ukraine’s exports and
imports amounted to 42.1% and 41.1% respectively.

Evgeniya Akhtyrko: The 8M18
goods trade deficit overshot our estimate of USD 4.8 bln.
The provisional customs statistics indicate that the trade deficit will amount
to USD 1.1 bln in September and bring the 9M18 result to around USD 6.1 bln.

We expect the 2018 goods trade deficit (according
to UkrStat methodology) to reach 9.0 bln, with import growth outpacing export
increase.