In October 2017, the current account deficit, as expected, narrowed to USD 408 million compared to September due to a significant decrease in primary income account outflows and continuing increase in transfers. At the same time, trade deficit in goods widened resulting in the increase of the current account deficit compared with October last year.
Since the beginning of the year, the current account deficit has grown slightly: to USD 3.3 billion from USD 2.9 billion year-on-year. This was primarily due to large purchases of machine building products and energy imports - natural gas and coal.
In October, exports of goods amounted to USD 3.5 billion. The annual growth rate remained high (16.7%) despite slowing down slightly.
Export growth was buttressed by large exports of certain commodities, particularly, oil and fats (their export grew by 23.7% compared with October 2016), oilseeds (by 61.9%) and dairy products (by 51%). Overall, exports of food grew slower (11.6% in October versus 22.5% in September) due to declining corn exports caused by this year’s lower yields.
The value of metallurgical product exports grew faster (23.4% yoy) due to both the increase in global prices and the accelerated growth in physical exports of finished ferrous products.
Against the background of lower than in the previous month global prices of iron ores, their exports grew slower, however, the annual growth rates remained robust (40.4%).
Overall, from January to October 2017, merchandise exports rose by 20.3%, compared with the same period a year ago. The highest growth in nominal exports was to the EU countries (USD 2.8 billion or 32.3%) and Asian countries (USD 1.1 billion or 12.2%). Exports to the EU accounted for 35.2% of total goods exports, up from 32.0% in the same period last year.
In October, import of goods amounted to USD 4.5 billion. In annual terms, its growth accelerated to 22.4% bolstered by imports of machine building and chemical products.
Growth of non-energy imports accelerated to 20.5% yoy driven primarily by machine building products (up by 33% yoy). Rise in export revenues of agricultural companies in recent years continued to be a driving factor for the import of agricultural machinery. Import of passenger cars was on the rise, an increase of 20.9% yoy.
Imports of chemical products grew by 29.4% yoy on the back of higher imports of fertilizers ahead of the winter sowing campaign.
Despite an insignificant slowdown, total energy imports grew by 28.8% yoy, with costs of coal imports being twice as high as those last year. Imports of oil products in value terms increased by 32.5% yoy against the backdrop of a high demand from agricultural producers and rising global oil prices.
Total imports of goods has increased by 22% since the start of the year. The highest growth in imports in nominal values was from the EU countries (USD 2.9 billion or 24.8%) and Russia (USD 1.5 billion or 37.0%). The share of the EU countries in the respective period increased from 36.9% to 37.8%, and that of Russia was up from 12.5% to 14.0%.
Net financial account inflows totaled USD 563 million (versus USD 257 million in October 2016) and were generated by the private sector.
Net inflows to private sector in October remained unchanged from the previous month, amounting to USD 0.5 billion. Decrease in foreign currency slowed down significantly, with bank seeing their assets dwindle.
Net FDI inflows amounted to USD 65 million being primarily channeled to the real sector.
Overall, the financial account recorded USD 5.3 billion in net inflows over nine months of 2017. In particular, net FDI inflows in the period was estimated at USD 2.1 billion (with bail-in operations accounting for 22% of the amount).
In October, the balance of payments recorded a surplus of USD 155 million. On this account, Ukraine's international reserves increased to USD 18.7 billion as of 1 November 2017, covering 3.7 months of future imports.
In January-October 2017, the balance of payments surplus reached USD 2.1 billion, which was higher than the surplus for the same period last year.
The October 2017 data are available under the External Sector Statistics section.
See the Macroeconomic and Monetary Review (November 2017) for more details on macroeconomic developments in September to be published on 30 November 2017.