Ukraine goods trade deficit reaches USD 0.7 bln in 1H16

Ukraine’s 1H16 goods trade balance reached a USD 683 mln deficit compared to a USD 694 mln deficit in end-May and a USD 341 mln surplus in 1H15, according to state statistics released on Aug. 15. In 1H16, goods exports slid 10.7% yoy on the back of falling chemicals (-38% yoy), minerals (-24% yoy) and metals (-24% yoy).  Imports dropped 5.3% yoy due to a 50% yoy decline in the energy sector. Non-energy imports maintained growth (at 18.7% yoy) on the back of recovering imports of vehicles (+75% yoy), machinery (+29% yoy) and chemicals (+14% yoy). 

Exports to CIS countries kept falling (-31.3% yoy for 1H16) while exports to the EU kept gaining momentum (+6.7% yoy).

Alexander Paraschiy: Ukraine’s external accounts keep benefitting from delayed natural gas imports. Ukraine imported nearly 3 bcm of gas in 1H16, which will triple in 2H16 given that the annual need is near 11-12 bcm. What’s more, the trade deficit traditionally expands in the second half of the year in line with the revival of business activity in the autumn months. Against this backdrop, we are keeping our initial trade deficit forecast at USD 3.5 bln (according to UkrStat methodology).