Ukraine C/A deficit jumps to USD 1.0 bln in September
31 October 2017
Ukraine’s current account (C/A) deficit in September jumped to USD 1.0 bln from USD 0.2 bln in the prior month largely due to a USD 505 mln Eurobond coupon payment, the National Bank of Ukraine (NBU) reported on Oct 30. The trade deficit also widened slightly to USD 672 mln from USD 512 mln in August. Exports were strong (16.4% yoy growth) and exceeded 15.1% yoy growth in imports in September for the second month.
Exports of goods (17.7% yoy growth) benefitted from a 85.2% yoy surge in mineral exports and a 22.5% yoy boost in food exports. Commodity imports grew 21.0% yoy on the back of energy imports (40.1% yoy), machinery (30.4% yoy) and chemicals (16.3% yoy). For 9M17, the C/A deficit reached USD 3.0 bln from a USD 2.7 bln deficit a year ago.
Financial and capital accounts improved to a USD 1.6 bln surplus from a USD 0.7 bln surplus in August (USD 1.4 bln a year ago), largely owing to USD 1.32 bln in proceeds from a Eurobond placement. FDI remained small (USD 180 mln). Individual cash returns to the banking system also shrunk to USD 167 mln from USD 496 mln in the prior month.
The combined balance in September (C/A plus capital and financial accounts) was USD 637 mln in the black, compared to a USD 518 mln surplus in August and a USD 443 mln surplus a year ago. The surplus pushed gross international reserves higher by 3.3% (USD 602 mln) to USD 18.6 bln, which is 3.7 months of future imports.
Alexander Paraschiy: External accounts performed better than expected. Exports improved on the back of food supplies while imports lagged behind. We still believe in stronger imports in the upcoming months but it’s already clear that the C/A deficit will not reach the USD 4.8 bln level that we projected initially amid the current strong export prices. So we are improving our C/A deficit forecast to USD 4.1 bln (3.9% of GDP) in 2017.
