Ukraine's balance of payments in May has recorded its surplus first this year, totaling $1 billion, the National Bank of Ukraine (NBU) reported on Wednesday.

The NBU said that the result is linked to the resumption of foreign financing of the government and the reduction of the deficit of the current account to $207 million compared to $421 million in May 2013.

The NBU said that the improvement of the current account is linked to the fall in non-energy imports by 22.9% caused by the devaluation of the national currency (since the start of the year the hryvnia's real effective exchange rate weakened by 23.4%) and low economic activity (industrial production fell by 4.6% in January-May).

Exports of goods grew by 1.7% on May 2013, to $5.2 billion thanks to the gradual resumption of supplies in the largest commodity groups: metal products by 8.3% thanks to the seasonal increase in demand for steel in the Middle East, agricultural products by 34.5% thanks to growth in supplies of grain by 82.5%, which is linked to the low comparison base in May 2013, and oilseeds and oil by 28.5% thanks to the record harvest in 2013.

For other commodity groups exports of chemical products fell by 26.4%, especially fertilizers by 45.2% and nonorganic chemical products by 42.6% due to the stoppage of production at the largest enterprises in Donetsk and Luhansk regions, engineering by 14.6% due to the fall in supplies of railway transport to Russia by 2.3 times.

The annual pace of imports decline in May slowed to 4.8% from 30% in April ($5.4 billion) thanks to growth in physical volumes of natural gas by 2.9 times compared to May 2013.

Imports fell in all key groups: engineering products by 31.8%, including passenger cars by 58%, railway transport by six times thanks to the partial replacement by Ukrainian-made products; chemical products by 15% mainly due to the reduction of imports of fertilizers by 3.6 times thanks to the partial replacement by Ukrainian-made products; and food and industrial goods by 25.8% and 24.8% respectively.

The surplus of the financial account of $1.2 billion in May was seen mainly thanks to borrowing by the state sector via government bonds and the receiving of loans from the World Bank and the European Union. In addition, in May, for the first time since early 2014, there was a net inflow of foreign direct investment (FDI) to Ukraine, of $7 million, thanks to the reduction of the outflow of shareholder capital. The deficit of the transactions with credits and bonds of the private sector totaled $455 million.

Growth in off-bank cash foreign currency continued falling - to $78 million - due to the reduction of devaluation expectations.

The NBU said that the receiving of a $3.2 billion loan from the International Monetary Fund (IMF) and the formation of the surplus of the consolidated balance of $1 billion allowed not only paying $365 million on the IMF loan and also boost the volume of reserve assets to $17.9 billion by the beginning of June, which allows financing imports for the next 2.5 months.