Ukraine C/A switches to surplus in April

Ukraine’s current accounts reached a USD 187 mln surplus in April compared to a USD 22 mln deficit in the same year-ago period, according to state statistics released on May 29. The main factor was a stronger imports decline (-38.2% yoy) compared to slightly better exports (-36.1% yoy). Goods exports plunged 39.1% yoy on the back of falling mineral products (-62.3% yoy), machinery supplies (-50.5% yoy), metals (-40.1% yoy) and food (-22.5% yoy). Goods imports plummeted 40.6% yoy owing to food (-53.9% yoy), metals (-47.4% yoy), machinery (-42.6% yoy), energy (-29.1% yoy) and chemical products (-26.8% yoy).

The financial and capital accounts deficit widened to USD 355 mln compared to a USD 210 mln deficit a year ago. External redemptions on loans and bonds (USD -734 mln) remain the key reason for the deficit, disregarding a EUR 250 mln loan that arrived from the EU in April. Net FDI was reported slightly positive (USD 20 mln) compared to a strong outflow (USD -459 mln) a year ago. Foreign currency cash returned to the banking system, creating a USD 131 mln surplus, compared to withdrawals that resulted in a USD 31 mln deficit in April 2014.

The general balance in April remained negative at a USD 168 mln deficit (compared to a USD 232 mln deficit a year ago), which coupled with USD 218 mln in redemptions to the IMF reduced gross international reserves by USD 339 mln to USD 9.6 bln (two months of future imports).

Alexander Paraschiy: The April external accounts performance is pretty much in line with our forecast. At the same time, the National Bank almost halved its estimate of 1Q15 C/A deficit to USD -452 mln from USD -836 mln estimated last month. This revision means that the year-end C/A deficit could be about USD 1.0 bln, which is much better than the USD 1.7 bln C/A deficit we initially projected. Still for the moment, we are not rushing to revise our projections given the extreme volatility of external trade. We do not anticipate worsened export dynamics. At the same time, we see a high probability of slowing imports decline due to the strengthened hryvnia in recent months.

Источник: Конкорд Капитал