Monthly Economic Monitor Ukraine, 2005

Українська

No. 62
December, 2005

• United States Senate voted for abolition of the "Jackson-Vanick Amendment" for Ukraine.

• The real GDP increased by 2.8% yoy during the first ten months.

• Mittal Steel Germany has already paid UAH 24.2 bn for "Kryvorizhstal" in corpore.

• The Verkhovna Rada adopted two more laws necessary for harmonization of Ukraine's legislation with the WTO rules.

• Parliament amended Budget Law 2005 and increased the fiscal deficit to 2.2% of GDP.

• Central government transferred additional UAH 2.8 bn to finance deficit of Pension Fund.

• The CPI decelerated to 12.4% yoy in October 2005.

• The NBU tightens the requirements for inside lending by commercial banks

The full version of the Monitor (89Kb)

MEMU Supplement: Russia - Ukraine gas negotiations: exploring compromise (28Kb)

No. 61
November, 2005

• Viktor Yushchenko has dismissed the Prosecutor General, Svjatoslav Piskun.

• The real GDP increased by 2.8% yoy during the first nine months of 2005.

• Mittal Steel Germany GmbH won the 're-privatisation' tender for the metallurgical enterprise Kryvorizhstal.

• The commodity trade balance turned to a negative USD 372 m after the first eight months of 2005.

• Between January and August real household incomes increased by 24.5% yoy.

• The CPI decelerated to 13.9% yoy in September 2005.

• Ukraine successfully issued EUR 600 m of ten-year Eurobonds.

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MEMU Supplement: Privatization of Kryvorizhstal (28Kb)

No. 60
October, 2005

• Parliament approved Mr. Yekhanurov as Prime Minister.

• The real GDP growth slowed to 2.8% yoy for the first eight months of 2005.

• Receiving UAH 8.1 bn in privatisation revenues in 2006 seems doubtful.

• Parliament approved the 'Law On Automobile Roads', which defines the rules for establishing toll roads.

• Ukraine completed bilateral negotiations on access to markets of goods and services with Iceland and Peru in the framework of the WTO accession.

• The central fiscal deficit for 2006 is projected to be 1.9% of GDP.

• In August the NBU refinanced the Ukrainian commercial banks with UAH 4.3 bn to insure their liquidity.

• The NBU approved regulations concerning the liberalisation of the foreign exchange market.

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MEMU Supplement: New Government - new hopes? (29Kb)

No. 59
September, 2005

• The President of Ukraine participated in the CIS summit and the meetings concerning the future of the Single Economic Space.

• The real GDP increased by 3.7% yoy during the first seven months of 2005.

• A new privatisation tender for 93.02% of the shares in the metallurgical plant Kryvorizhstal was launched.

• Ukraine and the EU signed a new agreement that regulates their steel trade during 2005-2006.

• Parliament increased the duty on cellular communications from 6% to 7.5% to benefit the Pension Fund.

• The NBU increased refinancing rate and toughened banks' reserve requirements.

• The Austrian Raiffeisen International acquired the Ukrainian Aval Bank and the Ukrainian Processing Center.

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MEMU Supplement: Is Ukraine on the verge of capital account liberalization? (28Kb)

No. 58
August, 2005

• An intergovernmental commission was created by Ukraine and Japan.

• Final household consumption was a key factor in the real GDP growth of the first quarter of 2005.

• The Government has adopted a list of enterprises to be privatised in 2005, including some strategic ones.

• The Cabinet of Ministers mandated state agencies to purchase 5.5 m tons of grain of the new harvest.

• Parliament passed several key laws within the framework of the WTO accession.

• The central fiscal surplus was UAH 1.1 bn or 0.6% of GDP for January to June.

• Wage arrears grew by 20.7% - now totalling UAH 1.3 bn - during the first half of the year.

• The public debt decreased by 6.9% during the first half of 2005.

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MEMU Supplement: A Ukrainian Sugar Crisis (27Kb)

No. 57
Jule, 2005

• Ukraine hosted a round-table organized by the World Economic Forum.

• The growth rate of the real GDP slowed to 4.7% yoy between January and May.

• The 93.02% share of "Kryvorizhstal" was returned to the state ownership.

• Parliament adopted changes to Ukraine's Customs Tariff that envisage significant import tariff rate reductions.

• The central fiscal surplus, calculated on a cash basis, reached UAH 2.7 bn or 1.3% of GDP between January and May.

• The deficit of the Pension Fund was approved at UAH 11.9 bn.

• A private Bureau of Credit Histories was founded in Ukraine.

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MEMU Supplement: Budget Resolution for 2006: Another "consumption budget" is expected (27Kb)

No. 56
June, 2005

• During his visit to Kazakhstan Mr. Yushchenko discussed questions of oil supply for Ukraine.

• In the first quarter of 2005 investments in fixed capital increased by a meagre 4.5% yoy.

• The Government reacted to the rising oil products prices by stimulating imports.

• Ukraine signed a bilateral protocol for access to markets of goods and services with El Salvador.

• Real household incomes grew by 24.1% yoy in the first quarter 2005 due to increases in the minimum wage and pensions.

• The banks slowed their lending activities due to investment uncertainties and the revaluation of the hryvnia.

• S&P upgraded Ukraine's sovereign rating to B+.

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MEMU Supplement: The Ukrainian gasoline "crisis" (30Kb)

No. 55
May, 2005

• During his visit to the USA Viktor Yushchenko, the President of Ukraine, met with the President George W. Bush and addressed a joint session of the Congress.

• The real GDP growth reached 5.4% yoy during the first quarter.

• To fight price increases, the Government set maximum prices for gasoline and temporarily banned the exports of oil products.

• The Government made an attempt to reduce meat prices by lowering import tariffs and by directly intervening in the market.

• The Cabinet of Ministers temporarily increased all railway freight transportation tariffs until the end of June 2005.

• Starting April 1, 2005 birth grants were increased to UAH 8497.

• The NBU revalued the hryvnia to 5.05 UAH/USD.

• The consumer price inflation stayed at a high 14.7% yoy.

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MEMU Supplement: Hryvnia Revaluation as a Measure to Combat Inflation? (72Kb)

No. 54
April, 2005

• The Putin-Yushchenko commission was established during a visit to Ukraine by the President of the Russian Federation, Vladimir Putin.

• Real GDP growth slowed to 5.5% yoy during the first two months, compared to 10.2% yoy during the same period last year.

• The import tariffs for selected exotic fruit, linen, underwear, footwear, and home equipment were significantly reduced.

• In 2004, the current account surplus reached the historical maximum of USD 6.8 bn, or 10.4% of GDP.

• The planned revenues and expenditures of Budget-2005 were increased to UAH 106 bn and UAH 114 bn respectively.

• In March inflation rose to 14.7% yoy.

• The 50% mandatory sale of foreign currency receipts was abolished.

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MEMU Supplement: Liberalizing the foreign exchange market: benefits and risks (35Kb)

No. 53
March, 2005

• Yulia Timoshenko became Prime Minister of Ukraine, supported by an overwhelming majority in Parliament.

• Viktor Yushchenko voiced Ukraine's interest in becoming a NATO member and later on an EU member.

• The real GDP grew by 6.5% yoy in January 2005, decelerating compared to the previous year's figure.

• The merchandise trade surplus reached USD 3.7 bn in 2004, with the enlarged EU now being the major trade partner of Ukraine.

• The review of the privatisation has created uncertainty over property rights in Ukraine.

• During January and February the NBU increased its official reserves to USD 10.9 bn.

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MEMU Supplement: New social liabilities: A fiscal gap of UAH 13.5 bn (37Kb)

No. 52
February, 2005

• Viktor Yushchenko was sworn in as President of Ukraine.

• Industrial output increased by 12.5% in 2004 thanks to growth in metallurgy, machine building and the food industry.

• The alienation of the metallurgical enterprise "Kryvorizhstal" to a third party was forbidden by a court decision.

• The State Treasury reported a central fiscal deficit of 3% of GDP for 2004.

• The minimum subsistence level and minimum pension increases may cause an additional 3% of GDP fiscal deficit in 2005.

• Fitch upgraded Ukraine's sovereign rating to BB-.

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MEMU Supplement (36Kb)

No. 51
January, 2005

• The re-run of the second round of presidential elections resulted in 51.99% of the votes being cast for Viktor Yushchenko vs. 44.19% for Viktor Yanukovich.

• The real GDP grew by 12.4% yoy from January to November, decelerating steadily.

• Privatisation receipts in 2004 reached UAH 9.6 bn.

• Ukraine signed another 5 protocols on accessions to goods and services markets within the framework of the WTO negotiations.

• The State Budget for 2005 was adopted with a deficit of 2.1% of GDP.

• Consumer prices increased by 12.3% eop in 2004.

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MEMU Supplement (76 Kb)

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