Ukraine goods trade deficit drops 74% m/m in April

Ukraine’s goods
trade deficit dropped 74% to USD 143.2 mln in April from USD 557.1 mln in the
prior month, the State Statistics Service stated in its June 14 preliminary
report. Meanwhile, the seasonally adjusted goods trade deficit jumped 21.9%
m/m, given seasonally adjusted exports and imports declined 3.6% m/m and 1.0%,
respectively.

In 4M18, the trade
deficit reached USD 1.4 bln, or a 46.9% yoy surge. Imports increased 15.1% yoy,
outpacing exports that grew 12.8% yoy. Goods imports were driven by machinery
(23.1% yoy), chemicals (16.6% yoy), and food (29.3% yoy).

Meanwhile, the
contribution of energy imports, which increased 1% in 4M18, was not significant
in overall import growth. Export growth continues to be driven by metals (31.8%
yoy growth in 4M18), machinery (22.9% yoy), and timber (45.2% yoy).

Exports to EU
countries grew 26.6% yoy in 4M18, outpacing import growth of 12.8% yoy.

Evgeniya
Akhtyrko: Ukrainian
goods exports have yet to enter a steady growth path, continuing to show
month-to-month swings. Meanwhile, rising energy imports (after a continuing
decline in 1Q18) imply that we are not likely to see deceleration in goods
imports. In addition, expected growing demand for investment and consumer goods
will also contribute to import growth.

The 4M18 goods trade
deficit of USD 1.4 bln was a bit lower than our estimate of USD 1.5 bln. Meanwhile, the provisional customs
statistics promise the trade deficit will swell to USD 1.9 bln for 5M18, which
is about 40% higher than a year ago. Our current projection for the 2018 goods
trade deficit (according to UkrStat methodology) is USD 7.0 bln (vs. USD 6.3
bln in 2017).