Ukraine 2M17 trade deficit narrows 44% yoy

Ukraine’s trade balance in goods for 2M17 reached a USD 423 mln deficit from the USD 757 mln deficit a year ago (USD 86.7 mln deficit in January), the State Statistics Service reported on April 14. 

Exports grew 32.7% yoy owing to the traditional factors of minerals (85% yoy), metals (46% yoy) and food (31% yoy). Imports rose 22.1% yoy owing to energy (50% yoy) and machinery (24% yoy). Non-energy imports increased 14% yoy in 2M17.

Exports to the EU slowed to 16% growth (from +26% yoy in January). Exports to the CIS countries eased to 50% yoy growth (from +69% yoy in January).

Alexander Paraschiy: The 2M17 trade balance was better than projected owing to soaring metal and iron ore prices. It was achieved despite the trade blockade of occupied Donbas imposed by paramilitary activists since February 10-11.

Still, we anticipate the trade deficit widening through the course of the year with energy imports strengthening (to compensate for interrupted coal supplied from Donbas) and export proceeds cooling (owing to an expected metal price rollback).

Against this backdrop, we are keeping our initial forecast of a USD 4.4 bln trade deficit in 2017 (according to UkrStat methodology).