Monthly Economic Monitor Ukraine, 2007

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No. 86
December, 2007

• The "orange coalition" was formed possessing a tiny majority of 227 seats in 450-member Verkhovna Rada.

• Real GDP growth remained at 7.3% yoy between January and October.

• The introduction of grain export quotas was postponed till December 31 to fill up the state reserve.

• The last bilateral protocols necessary for Ukraine's WTO accession were signed with Kyrgyzstan and Vietnam.

• Central fiscal deficit increased to UAH 9.3 bn (1.7% of GDP) between January and October due to higher execution of expenditures.

• The amended Draft State Budget 2008 envisages further increase in social expenditures.

• The NBU introduced reserve requirement on external borrowings of the banks.

The full version of the Monitor (94Kb)

MEMU Supplement: Delay in infrastructure reforms endangers economic growth in Ukraine (30Kb)

No. 85
November, 2007

• The official results on pre-term elections to the Verkhovna Rada were published on October 27, with two weeks delay.

• Real GDP growth was 7.3% yoy between January and September, relying mostly on high private domestic demand.

• Exports of grain harvested this year will start not earlier than in December due to cumbersome quota administration procedures.

• Between January and September the current account deficit increased to USD 2.5 bn, but was sufficiently covered by high inflows of long-term capital.

• Central fiscal deficit widened to UAH 7.5 bn (1.5% of GDP) in September.

• Inflation accelerated to 14.8% yoy in October.

• The NBU revised the regulations on the costs of external borrowings.

The full version of the Monitor (72Kb)

MEMU Supplement: Accelerating inflation: reasons and outcomes (30Kb)

No. 84
October, 2007

• Preliminary election results: five parties will be represented in the new Parliament.

• Real GDP growth decelerated to 7.5% yoy between January and August due to slowdown in agriculture value added.

• The President blocked the privatisation of Odessa By-Port Plant and suspended the sales of oblenergo shares.

• Current account deficit widened to USD 2.0 bn (3.4% GDP) in the first half of the year.

• Central fiscal deficit went down to 1.0% of GDP in August, primarily due to under-execution of expenditures.

• The Draft State Budget 2008: social standards are to be further increased.

• Inflation accelerated to 14.4% yoy in September.

• First Internet transaction took place at the PFTS.

The full version of the Monitor (92Kb)

MEMU Supplement: International financial crisis: echo in Ukraine (29Kb)

No. 83
September, 2007

• Parliamentary election campaign is going forward.

• Real GDP grew at 7.7% yoy between January and July backed by still high agricultural growth.

• The subordination of the National Commission on Communication Regulation remains unclear.

• According to the Derzhkomstat, the positive service trade balance started to shrink due to lower volumes of gas transit through Ukraine.

• In July the central fiscal deficit increased to 1.2% of GDP.

• Although reduced, unemployment is still more widespread among females, youth, and rural population.

• The NBU tries to impose new capital controls.

• Inflation accelerated to 14.2% yoy in August.

The full version of the Monitor (92Kb)

MEMU Supplement: Raiding in Ukraine: the case study (32Kb)

No. 82
August, 2007

• The President issued the fourth decree on the dissolution of the Verkhovna Rada.

• Real GDP growth remained at 7.9% yoy during the first half of the year.

• Current account deficit increased to USD 1.9 bn (3.2% of GDP) in the first six months of 2007.

• The subordination of the National Commission for Telecommunications Regulation was changed.

• Central fiscal balance turned into deficit in June and amounted to UAH 2.6 bn (0.9% of GDP).

• The Constitutional Court renewed social privileges postponed by the Law on the State Budget for 2007.

• Inflation accelerated to 13.5% yoy in July.

The full version of the Monitor (100Kb)

MEMU Supplement: Ukrainian agriculture needs reliable information systems (33Kb)

No. 81
July, 2007

• More than 150 deputies resigned leading to the incapability of Verkhovna Rada.

• Real GDP growth remained at 7.9% yoy during the first five months of the year.

• Export quotas were introduced for wheat, barley, corn and rye.

• Current account deficit increased to USD 1.3 bn (5% of GDP) in the first quarter.

• Central fiscal revenues were 4.8% above the target between January and May.

• Real household incomes grew by 17.5% yoy in the first four months of the year.

• Inflation accelerated to 13.0% yoy in June.

The full version of the Monitor (91Kb)

MEMU Supplement: Grain export quotas introduced (27Kb)

No. 80
June, 2007

• Early parliamentary elections are scheduled for September 30.

• In the first four months of the year the real GDP increased by 7.9% yoy.

• The second attempt to sell 1% of Ukrtelecom shares on domestic market failed.

• On May 31 the Verkhovna Rada passed 11 laws required to harmonize the legislation with the WTO rules and requests.

• The budget amendments passed in May envisage further growth in wages and social payments in 2007.

• Wages in public sector will increase with the implementation of the second stage of the Unified Tariff Scale.

• Inflation moved to 10.6% yoy in May.

The full version of the Monitor (75Kb)

MEMU Supplement: A turnaround in the political crisis occurred (28Kb)

No. 79
May, 2007

• The President and the Prime Minister agreed to hold early parliamentary elections.

• In the first quarter the real GDP increased by 8.0% yoy.

• The State Property Fund law was passed by Verkhovna Rada.

• Ukraine's membership in the WTO is likely to be postponed until 2008.

• Central fiscal surplus reached 1.4% of the GDP due to high tax revenues and considerable under-execution of expenditures.

• Between January and March real wages grew by 14.8% yoy.

• Inflation accelerated to 10.5% yoy in April.

The full version of the Monitor (81Kb)

MEMU Supplement: Political crisis and its impact on the economy (29Kb)

No. 78
April, 2007

• Parliamentary re-elections are scheduled for May 27.

• In the first two months of the year GDP increased by 8.6% yoy.

• The state renewed its practice of non-transparent privatization.

• ²n January 2007 growth rates of commodity exports and imports significantly accelerated compared to the previous year.

• The annual central fiscal deficit was increased to 2.6% of GDP according to the amended budget law.

• The minimum wage and subsistence minimum are to be increased.

• Inflation increased up to 10.1% yoy in March.

The full version of the Monitor (77Kb)

MEMU Supplement: New political crisis in Ukraine (48Kb)

No. 77
March, 2007

• The People's Union "Nasha Ukraina" and the Block of Yulia Tymoshenko signed an agreement on joint opposition activity.

• In January 2007 real GDP grew by 9.3% yoy.

• The government lifted export quotas for barley and corn.

• Parliament prohibited privatization of the gas transportation system or transferring it into concession.

• In 2006 the annual current account balance was negative at USD 1.6 bn or 1.5% of GDP.

• The central fiscal surplus reached 3.6% of GDP due to underexecution of expenditures.

• In February consumer prices inflation decelerated to 9.5%.

The full version of the Monitor (77Kb)

MEMU Supplement: Bio fuel policy in Ukraine - some comments (51Kb)

No. 76
February, 2007

• The Law on the Cabinet of Ministers became the focal point of political conflict in January.

• Real GDP grew by 7.0% yoy in 2006 thanks to strong domestic demand growth.

• The Parliament passed the law allowing privatisation of several large enterprises.

• New steel trade agreement with the EU was initialled in January.

• In 2006 the central fiscal deficit was 0.9% of GDP.

• Real wages grew by 18.4% yoy in 2006 maintaining the previous year trend.

• Consumer prices moved down to 10.9% in January.

The full version of the Monitor (73Kb)

MEMU Supplement: Railway transportation tariffs reform: prices are to increase, but the justification for the level of the change is still unclear (47Kb)

No. 75
January, 2007

• The dismissal of Borys Tarasyuk, the Foreign Minister, intensified the conflict between the President and the Prime Minister.

• Real GDP is expected to exceed 7.0% in 2006 after all revisions are taken into account.

• Grain quotas were extended to the whole 2006/2007 marketing year.

• Current account balance turned positive in the third quarter backed by the favourable external conditions.

• Budget 2007 was signed by the President after the Parliament agreed to revise social standards during 2007.

• In 2006 the consumer prices increased by 11.6% yoy.

• Profits of commercial banks more than doubled in 2006.

The full version of the Monitor (79Kb)

MEMU Supplement: Ukraine starts 2007 with the State Budget Law (29Kb)

Monthly Economic Monitor Ukraine:

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