During the January-August period, exports grew by 6.8% yoy to USD 22.4 bln while imports increased by 26.4% yoy reaching USD 22.8 bln. This resulted in a negative trade balance of USD 0.4 bln in 8M05. Concorde Capital: During 8M05 exports growth rates dropped seven-fold compared the same period in 2004. Adverse steel prices on world markets seriously undermined Ukraine’s metallurgy exports, a major contributor to total export revenues (~40%). At the same time, imports have been steadily growing from 4% yoy in January to 26.4% yoy for 8M05. Imports have benefited from substantially increased personal incomes as well as lower import duties and simplified customs procedures. This led to the evaporation of the export surplus from USD 681 mln in January to USD 118 mln in July, and it finally turned negative in August. However, due to the 8M05 export surplus in services, which we estimate to be ~USD 1.7 bln, Ukraine’s total foreign trade balance has remained positive at around USD 1.3 bln. The merchandise trade balance will likely to be at zero during the autumn months. We maintain our annual forecast of a USD 3 bln total trade balance for 2005.