Ukraine's consolidated balance of payments deficit grew to 1.8% of GDP in May - NBU

MOSCOW. July 2 (Interfax) - Ukraine had a consolidated balance of payments deficit of $3.4 billion or around 1.8% of GDP in May compared with a deficit of $1.3 billion or around 0.7% of GDP in April 2024, Ukrainian media reported, quoting the National Bank of Ukraine.

There was a consolidated current account surplus of $1.5 billion in May 2023.

The deficit in May 2024 excluding reinvested income and grants from international partners was $1.6 billion, compared to $167 million a month earlier and $1.1 billion in May 2023.

The deficit arose primarily from a wider merchandise trade deficit due to high imports and absence of grants from international partners.

The current account deficit widened by $2.7 billion to $6.4 billion in January-May 2024 however, excluding reinvested income and grants from international partners, it narrowed to $5.9 billion from $6.1 billion.

The NBU said merchandise exports in May rose 11.6% year-on-year but fell 1.7% compared to April 2024 to $3.3 billion, while imports increased by 12.8% and decreased by 3.3%, respectively, to $5.5 billion.

The services trade deficit was level with May last year at $0.6 billion with exports up 8.7% and imports rising 5.2%.

The primary income surplus was level with May last year at $0.3 billion while the secondary incomes surplus narrowed to $0.8 billion from $2 billion.

The NBU's June financial stability report forecasts a gradual widening of the current account deficit despite an improving trade balance.

"Ukrainian exports will recover slowly, primarily due to the stable operation of the maritime corridor [...]. However, relatively low world prices by historical comparison are keeping export revenue growth in check. But import volumes are increasing, fueled by consumer demand," the document noted.