The negative balance of foreign goods trade in 2018 increased by 1.6 times compared to 2017, and reached almost $6.5 billion over the first three quarters. According to the Deputy Chairman of the Opposition Bloc parliamentary faction Serhiy Lovochkin, this trend, against the background of low foreign direct investment, threatens the stability of the hryvnia.

“I2018 indicators in foreign trade are threatening the financial and economic situation in the country. The negative balance of foreign trade grew by $1.2 billion in the first quarter, by $2.66 billion in the second, and by $6.49 billion in the third. This is by 1.6 times more than the year before, and is the worst figure for the first three quarters over the past five years. Such trends jeopardize the stability of the hryvnia,” Lovochkin stated.

The politician noted that the main problem is the slowdown in export growth, which in 2018 in dollar terms is less than 75 percent of 2013 and approximately 68 percent of 2012 figures. With the current dynamics of export growth and subject to favorable conditions of foreign markets (which is extremely important in the situation with the export of metal and grain), it will be possible to reach the level of 2013 only in 2021.

Lovochkin says the statements about reorientation of Ukrainian foreign trade from the CIS countries to the European Union turned out to be a myth. Russia remains the key trading partner for Ukraine, both in exports ($2.7 billion or 7.9 percent of total volumes) and in imports ($5.8 billion or 14.2 percent of total volumes). Still, the situation has been deteriorating since the beginning of the year: exports to Russia decreased by 7.5 percent, imports increased by 21.0 percent.

While the loss of exports to the CIS countries over 2014-2018 amounted to $11.5 billion, exports to the EU over the same period increased by only $2.6 billion.

“This is one of the reasons why during the same period, the hryvnia exchange rate against the dollar fell from 8 UAH/USD to 28 UAH/USD. However, the current government does not learn from its mistakes. There are no real steps to save energy (although Ukraine has spent more than $9.5 billion on energy resources procurement since the beginning of the year), nor a program to promote Ukrainian products abroad,” Lovochkin stated.

The MP cited data that over the first nine months of 2018, the government has not allocated a single penny to promotion and development of exports out of UAH 278 million envisaged for the year. And next year, direct costs for these items are provided in the amount of only 158 million.

“The effect of such support for export growth and diversification is negligible, especially when even this money is not allocated. Having an open economy dependent on the situation on foreign markets, this is not the way to treat government export support policies. Since the crisis in the market of metal or grain immediately turns into an internal disaster. I am sure that such amateurish approach is becoming irrelevant. Changes in the country in 2019 will bring changes for the better,”  Lovochkin concluded.