Ukraine C/A surplus swells to USD 0.9 bln in November

Ukraine’s current account (C/A) surplus swelled by USD
933 mln in November from USD 847 mln in October, mostly due an increased surplus
of primary account income, the National Bank of Ukraine (NBU) preliminarily
reported on Dec. 30. The November trade balance was almost evened out with an
insignificant deficit of USD 80 mln, compared to a USD 10 mln surplus in
October.

 

The goods trade deficit enlarged to USD 579 mln from
USD 476 mln in October. The primary account income surplus swelled to USD 666
mln from USD 513 mln in the prior month amid a reduced deficit of income from
investment.

 

The fall in goods imports slowed to 5.4% yoy
(amounting to USD 4.9 bln) in November after a 19.4% yoy plunge in October. In
particular, imports of chemicals surged 23.8% yoy, accelerating from 3.4% yoy
growth in October. In addition, the decline in machinery imports slowed to 3.4%
yoy from 18.1% yoy in October. Imports of energy products dropped 33.6% yoy
(vs. 49.9% yoy in October). In 11M20, goods imports dropped 16.4% yoy.

 

Goods exports picked up 8.9% yoy to USD 4.3 bln in
November after inching up 0.3% yoy in October. In particular, food exports
jumped 11.3% yoy (vs. a 6.5% yoy decline in October). Exports of mineral
products surged 64.6% yoy (from 61.4% yoy growth in October). The decline of
ferrous metals exports slowed to 1.8% yoy (vs. a 2.8% yoy drop in October). In
11M20, goods exports declined 3.8% yoy.

 

The financial account deficit amounted to USD 0.9 bln
in November (vs. a USD 1.2 bln deficit in October). The net outflow related to
the government sector amounted to USD 141 mln, including the net payments to
nonresidents on local bonds of USD 142 mln. The volume of cash foreign currency
outside the banking system swelled by USD 702 mln. Net inflow under trade loans
amounted to USD 436 mln.

 

Ukraine’s balance of payments was almost balanced out
in November, having an insignificant deficit of USD 15 mln (vs. a USD 343 mln
deficit in October). In 11M20, the balance of payments deficit amounted to USD
0.8 bln (vs. a USD 2.7 bln surplus in 11M19).

 

Evgeniya Akhtyrko: Ukraine’s
external trade intensified in November, but exports and imports remained
balanced, maintaining a C/A surplus. Ukraine’s exports picked up significantly
amid restored growth in food exports, as well as swelled exports of mineral
products, which is likely to be the result of increased global demand for iron
ore.

 

Meanwhile, the decline of imports slowed down
significantly. The future trend in Ukrainian imports will largely depend on how
fast the demand for imported machinery is renewed. In particular, it might be
prompted by high government expenditures related to infrastructure projects.

We expect Ukraine’s C/A
surplus to be around USD 7 bln in 2020 (vs. USD 4.1 bln in 2019).