Ukraine goods trade deficit swells 61% m/m in February

Ukraine’s goods trade deficit reached USD 457 mln in
February, swelling 60.9% from USD 284.1 mln in the prior month, the State
Statistics Service reported on Apr. 16. Seasonally adjusted goods exports
decreased 3.6% m/m, while imports dropped 6.6% m/m, prompting the trade deficit
to decline 3.1% m/m.

In 2M18, the trade deficit reached USD 741.1 mln, a
50.8% yoy rise. Imports increased 20.7% yoy, outpacing exports that grew 17.9%
yoy. Goods imports were driven by machinery (33.4% yoy), chemicals (23.6% yoy)
and vehicles (23.2% yoy). Meanwhile, the role of energy in imports continued to
decline, shrinking 0.9% yoy in 2M18.

Export growth was mostly due to metals (27.0% yoy
growth in 2M18), machinery (28.4% yoy) and timber industry (54.6% yoy). 

Export growth to EU countries (36.2% yoy in 2M18)
outpaced the growth of imports (17.8% yoy). Meanwhile, import growth from CIS
countries of 22.2% yoy outpaced export growth of 11.6% yoy.

Evgeniya Akhtyrko: The balance
of external trade in goods in 2M18 was a little better than our estimate of USD 0.9 bln.
The provisional customs statistics for 1Q18 promise the trade deficit will
swell to USD 1.2 bln for the quarter, which is about 70% higher than a year
ago.

The continuing weak dynamics of energy imports
might prompt us to revise our current projection of the goods trade deficit of
USD 7.0 bln (according to UkrStat methodology) for 2018. Slower growth of
imports should alleviate devaluation pressure on the national currency.