In January, the current account balance approached zero, reaching USD (-61) million, in contrast to the surplus in January 2017. Despite accelerated export increase, imports of goods also grew rapidly thus expanding trade deficit. Further increase in remittances provided for a partial alleviation.
Exports of goods rose by 22% yoy and accounted for USD 3.4 billion. Export volumes increased across all major commodity groups. In particular:
- Exports of ferrous and non-ferrous metals maintained an upward trend (36% yoy) associated with both larger shipments of ferrous metals and continued rise in global metal prices.
- Likewise, ore exports picked up the pace sufficiently (25% yoy) in view of increased output and high global prices.
- Growth in exports of engineering products also gained momentum (to 42% yoy) as a result of larger shipments of turbojets, including to China, and other factors.
- Exports of foods renewed its rise (4% yoy) due to a rapid growth in exports of oil seeds and increased shipments of meat and dairy, to the EU likewise. However, annual growth rates of food exports were the lowest across commodity groups on account of fewer shipments of grain crops and sunflower oil caused by poor yields in 2017.
Imports of goods rose by 30% yoy in January primarily fostered by non-energy goods and accounted for USD 3.9 billion.
- Chemical imports increased by 46% yoy. Specifically, imports of pharmaceutical products to Ukraine surged by 35% yoy and fertilizer imports showed a 1.5-fold increase.
- Engineering imports continued to grow rapidly (32% yoy). Particularly, after a two-month drop, imports of agricultural machinery renewed growth.
- Gas stocks stored in underground facilities and a relatively warm January contributed to a continued scale-down of natural gas import volumes. At the same time, an ample hike in coal imports and advance in oil prices boosted growth in energy imports up to 16% yoy.
In January, outflows from financial account amounted to USD 388 million, practically matching the reading of January 2017. This trend was triggered by debt repayments in the real sector.
Net outflow of debt capital from the private sector made up USD 605 million, ultimately caused by repayments on long-term loans and reduced net debt on trade credits. Concurrently, a rise in non-resident investments in hryvnia domestic government bonds facilitated net capital inflows to the public sector.
Furthermore, January saw a recurring downturn of foreign currency holdings outside banks as households sold more foreign currency cash on net.
Net foreign direct investment accounted for USD 80 million in January and was mostly allocated to the real sector.
Generally, the balance of payments of Ukraine recorded a deficit of USD 449 million in January 2018 (versus USD 202 million in January 2017). Consequently, international reserves at the beginning of February decreased by 1.2% compared to the start of the year and, according to revised data, amounted to USD 18.6 billion or 3.5 months of future imports.
The updated data for January 2018 are available under the External Sector Statistics section.
More details on the current readings and the mid-term forecast of the balance of payments will be provided in the Macroeconomic and Monetary Review (February 2018), which will be published on 1 March 2018.