Ukraine goods trade deficit nearly doubles m/m in July

Ukraine’s goods trade deficit nearly doubled in July,
swelling 98.6% m/m to USD 1.3 bln from USD 670 mln in June, the State
Statistics Service stated in its preliminary report released on Sept. 14. The
seasonally adjusted goods trade increased 35.7% m/m amid a seasonally adjusted
export decline of 7.0% m/m and seasonally adjusted import growth of 0.7% m/m.

In 7M18, the trade deficit reached USD 4.1 bln, or a
43% yoy surge. Imports advanced 15.9% yoy, outpacing exports, which grew 12.7%
yoy. The major contributors to imports growth included machinery (19.2% yoy),
energy (12.7% yoy), and chemicals (12.5% yoy). In addition, food imports surged
28.9% yoy, expanding their role in the import structure.

Export growth continues to be driven by ferrous metals
(24.1% yoy growth in 7M18), machinery (19.2% yoy), and timber (32.1% yoy).
Exports to the EU grew 18.7% yoy in 7M18, outpacing import growth of 13.3% yoy.

Evgeniya Akhtyrko: The 7H18
goods trade deficit overshot our estimate of USD 3.8 bln. The
provisional customs statistics indicate that the trade deficit will amount to
USD 0.9 bln in August and bring the 8M18 result to around USD 4.8 bln.

Our current projection for the 2018 goods trade
deficit (according to UkrStat methodology) of USD 7.0 bln might be too low
should deficit growth be maintained at the current pace. Possibly, the boosted
exports of agricultural produce could restrain trade deficit growth through the
end of the year.