Ukraine Current Account Deficit 2008

Ukraine's current-account deficit widened to 4.2 percent of gross domestic product in 2007 as imports outstripped exports in the former Soviet state.

The deficit totaled $5.92 billion, compared with $1.62 billion in 2006, the central bank said today. In the fourth quarter, the shortfall widened to $3.45 billion from $488 million in the previous three months.

Ukraine posted a current-account deficit of 1.5 percent of GDP in 2006, the first shortfall in seven years, after Russia doubled the price at which it sells natural gas to Ukraine and the government stopped grain exports. Russia also banned some Ukrainian food imports, including meat and dairy products.

Exports were $49.8 billion in all of 2007, the bank said, while imports totaled $60.4 billion, according to the central bank. Import growth also outpaced exports because of strong domestic consumption, spurred by higher wages, the bank said. It was also driven by companies that had to import equipment for their upgrades, according to the bank.

Foreign direct investment into Ukraine rose to a record to $9.2 billion last year, the central bank said.