Monthly Economic Monitor Ukraine, 2008

Українська

No. 98
December, 2008

• On December 9, Volodymyr Lytvyn was elected as the new Speaker of the Verkhovna Rada.

• Between January and October real GDP growth slowed to 5.8% yoy due to collapse in manufacturing and trade.

• Trade barriers and low demand hamper grain exports.

• The NBU estimated current account deficit at USD 10.5 bn or 6.5% of GDP in the first ten months of 2008.

• Central fiscal deficit reached 0.3% of GDP between January and October.

• Consumer price inflation slowed to 22.3% yoy in November.

MEMU Supplement: Global financial crisis: impact on Ukraine's banking sector

No. 97
November, 2008

• Ukraine was granted an IMF stand-by loan to cope with the crisis.

• Between January and September real GDP growth slowed to 6.9% yoy as manufacturing and agriculture decelerated.

• Despite a large harvest, low prices and tight credit endanger financial conditions of agricultural producers.

• Current account deficit is estimated at USD 8.4 bn or 5.8% of GDP in the first three quarters of 2008.

• Consumer price inflation slowed to 23.2% yoy in October.

• Exchange rate suffered from extreme volatility with the peak at 7.05 UAH/USD on October 29.

• Measures have been taken to stabilise the situation in the banking sector.

MEMU Supplement: Global financial crisis: impact on the real sector in Ukraine

No. 96
October, 2008

• Ruling coalition broke up after pro-presidential faction left it, protesting against the adoption of laws that dilute the powers of the President.

• Between January and August, real GDP growth jumped to 7.1% yoy as good crop harvest boosted agriculture.

• The Law on Joint Stock Companies was adopted by the Verkhovna Rada, but still not signed by the President.

• Current account deficit is estimated at USD 7.5 bn in the first eight months of 2008.

• Draft State Budget for 2009 envisages further increases in wages and pensions.

• Consumer price inflation slowed to 24.6% yoy in September.

• Fitch rating agency downgraded rating outlook for nine large Ukrainian banks.

The full version of the Monitor (94Kb)

MEMU Supplement: International financial crisis: black September (38Kb)

No. 95
September, 2008

• Military conflict between Russia and Georgia was in the centre of political discussions in Ukraine in August.

• Between January and July real GDP growth accelerated to 6.5% yoy as good crop harvest boosted agriculture.

• Gas tariffs for households were increased.

• Crop harvest is estimated at up to 49 m tons, though with a high share of feed grain.

• Merchandise exports and imports grew at record pace in the first half of 2008.

• In July the central fiscal deficit remained at 0.3% of GDP.

• Government provided assistance to the flood victims.

• Consumer price inflation slowed to 26.0% yoy in August as seasonal goods limit price growth.

The full version of the Monitor (118Kb)

MEMU Supplement: July floods in Ukraine: lessons to be learned (23Kb)

No. 94
August, 2008

• The parliament closed its second session with old State Budget.

• Between January and June real GDP growth slightly decelerated to by 6.3% yoy as trade and manufacturing slowed.

• Long-distance fixed-line call tariffs were deregulated.

• In the first half of 2008 current account deficit widened to USD 6.7 bn due to rapid growth of commodity imports.

• The net FDI inflow reached USD 5.1 bn between January and June due to continued mergers and acquisitions in the financial sector.

• In June the central fiscal deficit amounted to 0.3% of GDP.

• Consumer price inflation slowed to 26.8% yoy in June as vegetable prices return to their 2007 level.

• The NBU Council changed its exchange rate benchmark.

The full version of the Monitor (129Kb)

MEMU Supplement: New rules for electronic money market: the end or new milestone (67Kb)

No. 93
July, 2008

• The questions on formal existence of the coalition appeared after two members of the Parliaments left it.

• Between January and May real GDP increased by 6.4% yoy backed by acceleration in trade and manufacturing.

• The long-awaited State Privatisation Program for 2008-2012 was adopted in the first reading.

• In the first quarter current account deficit widened to USD 3.6 bn due to rapid growth of commodity imports.

• In May the central fiscal surplus reached 0.5% of GDP as revenues continue to exceed targets.

• Consumer price inflation decelerated to 29.3% yoy in June thanks to considerable slowdown in food prices.

• The stock market declined by 33.8% in the first half of 2008.

The full version of the Monitor (120Kb)

MEMU Supplement: Crisis within the parliamentary coalition (55Kb)

No. 92
June, 2008

• Tensions between the President and the Prime Minister continued to grow.

• Between January and April real GDP increased by 6.2% yoy backed by strong private consumption, while investments slowed.

• Gas prices for industrial consumers are going up.

• The Government cancelled grain export quotas.

• In the first quarter merchandise trade deficit reached USD 5.0 bn.

• In April the central fiscal deficit reached 1.0% of GDP as expenditures execution continued to improve.

• The Constitutional Court ruled to restore social benefits.

• Consumer price inflation accelerated to 31.1% yoy in May.

• The NBU revised hryvnia official exchange rate against US dollar upwards by 4%.

The full version of the Monitor (92Kb)

MEMU Supplement: The last days of fixed exchange rate (75Kb)

No. 91
May, 2008

• Coalition becomes increasingly divided.

• Real GDP growth reached 6.0% yoy in the first quarter of 2008.

• The Government increased grain export quotas and extended them to June.

• In May Ukraine will become the newest WTO member after the Verkhovna Rada ratified the final agreement last month.

• The central budget turned into deficit in the first quarter as the execution of expenditures improved.

• The Government delayed introduction of targeted social assistance.

• Consumer inflation reached 30.2% yoy in April as meat and vegetable prices jumped.

• Hryvnia steadily appreciated against US dollar despite the NBU interventions.

The full version of the Monitor (89Kb)

MEMU Supplement: Inflation revisited: new records (33Kb)

No. 90
April, 2008

• In March the Parliament has gradually resumed its activity after a long break.

• Real GDP growth accelerated to 5.8% yoy between January and February thanks to strong industrial growth.

• The Government introduced restrictions on exports of sunflower seeds and oil.

• Another round of gas negotiations was completed between Naftogaz and Gazprom.

• The central budget was close to balance between January and February as the execution of expenditures remained low.

• The Government further increased social payments.

• Interest rates remain high due to very tight liquidity.

• Hryvnia appreciated slightly as the NBU appeared to shift to more flexible exchange rate management.

The full version of the Monitor (72Kb)

MEMU Supplement: New restrictions on grain and oilseeds exports (30Kb)

No. 89
March, 2008

• The work of the Parliament remained blocked in February.

• Real GDP growth decelerated to 4.9% yoy in January due to the contraction of construction.

• A new scheme of gas deliveries was negotiated between the Presidents of Russia and Ukraine.

• In February the tender for the 99.52% shares of Odessa by-port plant was launched.

• In mid-February export grain quotas were finally distributed and grain shipments started.

• Central fiscal surplus reached 0.9% of GDP in January as the execution of expenditures was low at the beginning of the year.

• Real household income increase by 16.7% yoy in 2007 supported by increase in wages, social transfers and capital incomes.

• Inflation rate accelerated to 21.9% yoy in February.

• The NBU strengthened capital adequacy requirements.

The full version of the Monitor (89Kb)

MEMU Supplement: Ukraine is in the World Trade Organisation, almost (29Kb)

No. 88
February, 2008

• The work of the Verkhovna Rada has been blocked by the opposition.

• Real GDP increased by 7.3% yoy in 2007, maintaining the growth rate of the previous year.

• The Government approved the list of enterprises for privatisation in 2008.

• The WTO adopted Ukraine's "accession package", thereby successfully completing the fourteen-year negotiations.

• The central fiscal deficit reached 1.7% of GDP in 2007 and was financed from the Treasury account and through the state borrowings.

• The Government started the payments of compensations to the owners of the devalued savings in the Soviet Sberbank.

• Inflation in January accelerated to 19.4% yoy.

• Hryvnia faced depreciation pressure against US dollar in January.

The full version of the Monitor (73Kb)

MEMU Supplement: Compensation of devalued savings in the Soviet Sberbank was launched in January (27Kb)

No. 87
January, 2008

• A new government has been formed with Yulia Tymoshenko appointed as Prime Minister.

• Real GDP growth decelerated to 7.2% yoy between January and November.

• Price of the imported gas faced 38% increase and was fixed at USD 179.5 per tcm for 2008, while the cost of gas transit was increased by 6% only.

• Current account deficit reached USD 2.2 bn between January and September but is still covered by high capital inflows.

• Central fiscal deficit is planned at 2.1% of GDP in 2008 and is supposed to be financed at the expense of both borrowings and privatisation receipts.

• The unemployment rate declined to 6.2% in the third quarter of 2007.

• Inflation in December accelerated to 16.6% yoy.

The full version of the Monitor (77Kb)

MEMU Supplement: Budget 2008: A temporary solution was found (30Kb)

Monthly Economic Monitor Ukraine:

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