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Highlight: The SOE reform
Overall, Ukraine had 3392 SOE with aggregated assets at UAH 1.6 trillion in September 2017 (for the comparison, there are 301 SOE in Poland and 371 SOE in Hungary). According to the data of the Ministry of Economic Development and Trade (MEDT), only 1611 SOE were in operation in the first nine months of 2017. 1051 SOE reported profits, while other were loss making. The MEDT assessed positively the management efficiency of only 22 out of 84 entities that manage SOE. The SOEs also receive bulk of the state aid. Inefficient governance of the SOEs contributed to the IMF-estimated state aid to SOE (including subsidies and privileges) at 5% of GDP in 2017.
Executive summary
Real sector: Real GDP increased by 2.5% in 2017 due to higher domestic demand. Net real exports made negative contribution to the growth.
Energy sector:The Cabinet of Ministers postponed the decision to raise gas tariffs for the households till June 2018 despite Ukraine`s obligations taken in the IMF program.
Transport:International airports “Boryspil” (in Kyiv) and “Lviv” signed agreements with the Irish lowcost carrier Ryanair.
Agriculture:As of March, around 99.7% of seeded winter cropsand 98.6% of winter rapeseed successfully sprouted.
External sector:The NBU in March revised the methodology for calculating remittance flows, which resulted in the revision of balance of payment figures for the recent three years.The current account deficits narrowed.
Fiscal policy: According to the preliminary data of the State Treasury, central fiscal revenues in the first quarter of 2018 increased by 10.8% yoy, which is slower than planned.
Social policy: The Government started the monetisation of privilegeson transport services.
Labour market: Unemployment rate was at 9.5%of economically active population in age of 15-70 years old in 2017 as compared to 9.3% in 2016.
Monetary policy: Consumer inflation slowed slightly to 13.2% yoy in March from 14.0% yoy in February.
Exchange rate: Growing export revenues and lower depreciation expectations contributed to stronger hryvnia in March.
State debt:The Ministry of Finance increased yields for domestic government bonds due to higher NBU discounted rate.
