Monthly Economic Monitor Ukraine, 2000

Українська

No. 2
November, 2000

• The gas disputes with Russia are finally to be settled during the meeting of CIS leaders at beginning of December. Several major points have already been agreed on.

• The economic upturn to 6.1% yoy in October improves the GDP forecast for the year 2000 to 4.8%.

• In the forth quarter strong economic growth in major trading partners will promote further export expansion. However, for seasonal reasons imports are expected to outpace export.

• A draft state budget based on a zero deficit has been adopted for 2001 in the second reading. Final approval is one of the major conditions for the resumption of the IMF financing.

• The inflation rate will remain high until the end of 2000. A tightening of the monetary policy is expected in 2001.

• The NBU wants the Hryvnia to remain stable until the end of 2000. In 2001 it intends to actively intervene in the currency market.

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No. 1
October, 2000

• The Ukrainian economy kept growing for the 9^th month in a row. The GDP increase is expected to reach 3.2% in 2000, but a slowdown next year seems likely.

• In the light of continuing good export performance, the current account could post a surplus of 2.5% of GDP in 2000, yet import growth is likely to outpace exports in the months ahead for seasonal reasons.

• In view of the good budget performance a balanced budget is achievable in 2000. The budget for 2001 was adopted by Parliament in first reading, a slight deficit is likely because assumptions seem too optimistic.

• The inflation rate could stay above 30% until the end of the year. In 2001, a more restrictive monetary policy could result in a slowdown in the price increase.

• The Hryvnia exchange rate remained stable due to National Bank interventions in the inter-bank market. A controlled nominal depreciation is expected to avoid a further real appreciation.

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