Ukraine goods trade deficit shrinks to USD 0.6 bln in March

Ukraine’s goods trade deficit reached a USD 621 mln deficit
in March, shrinking from USD 825 mln in February, the State Statistics Service
said in its preliminary report on May 15. The seasonally adjusted goods trade
deficit amounted to USD 635 mln (a 20.1% m/m fall from a USD 794 mln deficit in
February) amid 2.0% m/m growth in adjusted exports and a 1.4% m/m drop in
adjusted imports.

In 1Q19, the trade deficit reached USD 1.5 bln,
increasing 13.0% yoy. In 1Q19, goods exports advanced 7.4% yoy to USD 12.3 bln.
Meanwhile, goods imports rose 7.9% yoy to USD 13.7 bln. The agricultural sector
remained the major contributor to export growth. In particular, grain exports
surged 52.0% yoy and finished food product exports picked up 18.3% yoy. At the
same time, exports of ferrous metals and machinery declined 6.5% yoy and 5.6%
yoy, respectively.

Road vehicle and aircraft imports surged 49.6% yoy,
being a major contributor to rising imports overall. In addition, machinery
imports climbed 8.7% yoy.

Exports to the EU grew 3.4% yoy in 1Q19, while EU
imports jumped 10.5% yoy. The share of the EU in Ukraine’s exports and imports
amounted to 42.7% and 42.1%, respectively.

Evgeniya Akhtyrko: March’s
trends in external trade in goods were extended from the prior month. The goods
trade deficit coincided with our expectations.

The provisional customs statistics released this month
promise that April’s trade deficit will stay at around USD 0.6 bln amid some
month-to-month decrease both in exports and imports.

We expect the 2019 goods trade deficit (according
to UkrStat methodology) will swell to USD 11.5 bln (from USD 9.8 bln in 2018),
with import growth outpacing export gains.