Ukraine C/A deficit reaches USD 0.4 bln in October

2017/12/1 23:32:43

Analyst: “Imports fueled an increasing trade deficit, a trend we expect to continue till the year end. Against this backdrop, we are keeping our C/A deficit forecast unchanged at USD 4.1 bln (3.9% of GDP) for 2017.”


 

 

 

 

 

 

 

 

 

 

 

 

 

KYIV, December 1, 2017 - Ukraine's current account (C/A) deficit was reported at USD 408 mln for October, Concorde Capital informed clients based on a report by the National Bank of Ukraine (NBU) on Nov. 30. The deficit is lower than a month ago (USD 901 mln) when there was a USD 505 mln Eurobond coupon payment in September. However, this deficit is twice as large as a year ago (USD 180 mln in October 2016).

 

In October, import growth of 20.4% yoy again exceeded exports growth (14.4% yoy), which was not the case during the last two months. Goods exports rose 16.7% yoy owing to minerals (50.7% yoy), metals (23.4% yoy) and foods (11.6% yoy). Goods imports grew 22.4% yoy on the back of machinery (33.0% yoy growth), energy (30.3% yoy) and chemicals (29.4% yoy).

 

For 10M17, the C/A deficit widened to USD 3.3 bln from a USD 2.9 bln deficit a year ago.

 

In October, the financial and capital accounts surplus narrowed to USD 563 mln vs. USD 1,538 mln in the prior month. However, it was much better than a year ago (USD 271 mln surplus in October 2016). FDI was shallow (USD 65 mln) as well as portfolio investments (USD 88 mln).

 

Individual cash returns to the banking system also dropped to USD 8 mln through the month (from USD 87 mln in September and USD 457 mln in August). Reduced external loans exposure of commercial banks (by USD 1.0 bln) was the main source of the financial accounts surplus in October.

 

The combined balance in October (C/A plus capital and financial accounts) was USD 155 mln in the black (compared to USD 637 mln surplus in September and USD 91 mln surplus a year ago). The surplus boosted gross international reserves by 0.5%, or USD 98 mln, to USD 18.7 bln, or 3.7 months of future imports.

 

Concorde analyst Alexander Paraschiy added: “The October external account numbers were perfectly in line with our estimates. Imports fueled an increasing trade deficit, a trend we expect to continue till the year end. Against this backdrop, we are keeping our C/A deficit forecast unchanged at USD 4.1 bln (3.9% of GDP) for 2017.”

 

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For more information, link here: www.concorde.ua 

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