National Bank of Ukraine: imports of Russian goods increased in 2017
The National Bank of Ukraine (NBU) released a report on the country’s 2017 payment balance, noting that for the third year in a row, the country has managed to finish the year with a surplus: USD 2.6 billion compared to USD 1.3 billion from the year before. At the same time, the 2017 current account shows a deficit of USD 3.8 billion as against USD 3.5 billion year over year. The data was published on the Regulator’s website.
According to the report, import total volume grew by 21% to USD 49 billion with the largest share attributed to the EU countries (grew by 23% in 2017) and Russia (up 40% in 2017). The NBU attributed the increase in imports from Russia mainly to coal, oil products and fertilizers.
A report on foreign trade details the volume of Ukrainian exports to Russia in 2017 amounting to USD 3.3 billion. Imports from Russia amounted to USD 7.1 billion. Exports to Europe were worth USD 14.4 billion and imports from Europe totaled USD 20 billion.
In general, the increase in imports of energy products was due to a deficit in the domestic market. “The internal market experienced a deficit of coal, most of which came from the uncontrolled territories (held by Russian-backed separatist ‘Donetsk and Luhansk People’s Republics’) in previous years, which pushed up coal imports. In addition, the activated sector of private importers of natural gas led to the increased volumes of gas purchases,” the NBU explained.
A trade blockade of the separatist-held Donbas that started in early 2017 caused a significant shortage of anthracite coal supplies as the breakaway region accounted for one third of the coal consumed by thermal power plants. President Petro Poroshenko warned that the blockade could cost Ukraine USD 2 billion.
Ukrainian exports grew by 19% to USD 39.9 billion in 2017. The growth was mostly due to meat-milk products, grain, sunflower seed and fats. Exports of ferrous metals produced in eastern Ukraine were curtailed by the ongoing military conflict in the Donbas but the hike in prices in the world markets allowed the volume to grow by 22.1%.
Ukraine increased its export of goods to EU countries from 32% to 35.4%, with the EU being a major trading partner. The Russian share in overall export of goods by Ukraine dropped from 9.1% to 8.5%.
Net inflow of capital in the financial account of Ukraine was estimated by the Regulator at USD 6.4 billion compared to USD 4.7 billion by the end of 2016. The National Bank stressed that the state was very active and was the main attractor of foreign capital to Ukraine in 2017. Driven by the state, the country managed to attract USD 2.3 billion in foreign investments as against USD 2.1 billion in 2016.
According to the NBU, Ukraine’s foreign currency reserves grew by 21% to USD 18.8 billion in 2017.