Real GDP declined by 4.7% yoy in the second quarter of 2014 according to preliminary Ukrstat estimate. This likely reflects falling investment and slowdown in consumption.
Highlight: Budget amendments - BUDGET LAW AND TAX CODE AMENDMENTS: WILL THEY IMPROVE THE SITUATION?
In July budget revenue shortfalls were increasing due to economic slowdown, while security and defence programs required more financing. The Government also needed to reach agreement with the IMF mission on continued funding under the Stand-by arrangement. IMF mission agreed to revise performance indicators of the Program due to worse than previously expected economic downturn. The Government still needed to implement a package of revenues and expenditures measures to compensate for high security spending and reduce structural deficit. However, consultations between Parliament factions and the Government on the approaches to revise the budget almost led the Prime Minister Arseniy Yatsenuyk to submit his resignation. In the end, the compromise was found and fiscal parameters were revised to satisfy the requirements of the IMF and finance the military operations in the Eastern Ukraine. The government resignation was not accepted.
View the contents of the new issue of MEMU No.8 (166)