In March, Ukraine’s government adopted the Action plan for reforms in 2015 and 2016 while the IMF board approved four-year USD 17.5 bn extended arrangement under the Extended Fund Facility (EFF).
In March, Ukraine’s government adopted the Action plan for reforms in 2015 and 2016 while the IMF board approved four-year USD 17.5 bn extended arrangement under the Extended Fund Facility (EFF).
The industrial output in January dropped by 21.3% yoy due to protracted military conflict in Donbas and weak demand.
Industrial output in December contracted by 17.9% yoy due to military conflict in Donbas (according to official statistics companies that stopped reporting to Ukrstat (e.g. in the conflict zone) are assumed to have stopped working).
Tax reform is again a major topic for debate in Ukrainian society. It is not surprising given narrow tax base, high burden of complying with tax regulations, low confidence in tax authorities and payroll tax burden similar to most socially oriented West European economies. As usual, business will likely receive new tax rules close to Christmas.
Highlight: TAX REFORM
It is settled that provisional application of Deep and Comprehensive Free Trade Area (DCFTA) between Ukraine and the EU will start since January 1, 2016. In a response, Russia is expected to increase trade barriers vis-à-vis Ukrainian goods.
Highlight: TRADE WITH RUSSIA
The coming heating season of October 2015 – April 2016 may be the most challenging season for the Ukrainian energy sector since Ukraine’s independence. Each subsector of energy sector (coal sector, electricity generation, and gas sector) has its own challenges in addition to the general problems like military conflict in the East, currency depreciation, debt accumulation, and high inflation. Tackling those challenges is essential for the smooth passing of the coming heating season.
Highlight: WINTER IS COMING
In November the industrial output dropped by 16.3% yoy primarily due to military conflict in the East of Ukraine and decline in demand for Ukrainian goods from Russia. Machine building production contracted by 23.6% yoy due to lower domestic demand for investment goods and vehicles as well as decline in demand of Russia for locomotives and railway carriages.
Recent Ukrstat data confirm that Ukrainian economy stabilized to some degree over the last few months. Inflation went down, exchange rate fluctuated within narrow range, retail sales and industrial production stopped falling.