Ukraine C/A switches to the surplus of USD 0.2 bln in August

Ukraine’s current account (C/A) switched to a surplus
of USD 205 mln in August from a deficit of USD 378 mln in the prior month
mostly due to an improved trade balance, the National Bank of Ukraine (NBU)
preliminarily reported on Sept. 30. The goods trade deficit shrank to USD 157
mln from USD 697 mln in July, while the surplus of trade in services increased
to USD 234 mln from USD 227 mln. The deficit of the primary account shrank to
USD 260 mln from USD 328 mln in July. At the same time, the surplus of the
secondary account declined to USD 388 mln from USD 420 mln in July.

 

In 8M21 the C/A deficit amounted to USD 0.8 bln (vs. a
USD 4.7 bln surplus in 8M20).

 

Goods exports jumped 52% yoy in August (vs. 55% yoy
growth in July) to USD 5.9 bln. The growth was mostly driven by a surge in
exports of ferrous metals (2.1x yoy) and mineral products (2.2x yoy). In
addition, food exports jumped 26% yoy, exports of chemicals surged 97% yoy,
while machinery exports declined 7% yoy.

 

Goods imports growth accelerated 41% yoy to USD 6.0
bln in August (vs. 36% yoy growth in July). In particular, imports of mineral products
surged 2.3 times, chemical imports advanced 48% yoy. In addition, imports of
machinery advanced 14% yoy and imports of foods jumped 25% yoy.

 

The financial account was almost balanced in August
having an insignificant deficit of USD 77 mln (vs. the surplus of USD 861 mln
in July). In particular, the net outflow under the operations of the government
sector amounted to USD 384 mln. The net inflow from foreign direct investment
is assessed at USD 747 mln, including income reinvestment of USD 563 mln. At
the same time, the net foreign currency inflow from the banking sector amounted
to USD 205 mln, while the outflow under the trade credits amounted to USD 332
mln.

 

The surplus of Ukraine’s balance of payments amounted
to USD 126 mln in August (vs. a USD 484 mln surplus in July).

 

In 8M21, the surplus of Ukraine’s balance of payments
amounted to USD 0.9 bln (vs. a surplus of USD 1.5 bln in 8M20).

 

Evgeniya Akhtyrko: Ukraine’s
external goods trade is booming amid ever-high global commodities prices. Both
monthly volumes of goods exports and imports haven’t been this high since 2013.

 

The developments in Ukraine’s external trade in
upcoming months will mostly depend on the trends in different global commodity
groups. We expect Ukraine’s C/A deficit to land at USD 1 bln in 2021 (vs. a USD
5.2 bln surplus in 2020).