Ukraine's current account deficit hits 6.5% of GDP in 10M08

According to the National Bank’s preliminary report on Ukraine’s balance of payments, Ukraine’s current account deficit widened to USD 10.5 bln (6.5% of GDP) in 10M08. The trade deficit reached USD 14.3 bln: exports totaled USD 59.5 bln while imports amounted to USD 73.8 bln. The capital account surplus (USD 12.7 bln) managed to cover the C/A shortfall in 10M08,however, in the month of October, the capital account balance was negative (USD 2.1 bln). Andrii Parkhomenko: The deterioration in both current and capital accounts is the key reason for the sharp fall in the UAH/USD rate, 59% since the beginning of September. However, though the current and capital accounts will remain negative in 2009, we believe that the decrease in demand for imports, as well as the cheaper hryvnya will help to improve the C/A imbalance. We forecast C/A deficit to make 3.3% of GDP in 2009.