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  • Monthly Economic Monitor Ukraine No.8 (166)

    11.08.2014
    Free

    Highlight: Budget amendments - BUDGET LAW AND TAX CODE AMENDMENTS: WILL THEY IMPROVE THE SITUATION?

    Politics: Early Parliamentary election is expected in October as ruling coalition was formally disbanded in the Parliament.

    Real Sector: 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 growth.

    Energy sector:To compensate for lack of the Russian gas imports Ukrainian government takes steps to replace gas imports and decrease gas consumption.

    Agriculture: Ukraine exported a record 32.2 m tonnes of grains in the 2013/2014 marketing year and grain harvest is likely to exceed 60 m tonnes again in 2014.

    Privatisation. On the 17th of July the Government approved the list of stakes in 164 companies to be sold in 2014.

    External sector: Current account deficit in June reached USD 0.4 bn despite low merchandise trade deficit due to income outflows and low services export.

    Fiscal policy: Gross fiscal revenues (before VAT refunds) in July were lower than planned by 6.6% or UAH 16.2 bn.

    Social policy:The Parliament approved more direct control of the Government and the Ministry of Social Policy over social security funds.

    Labour market: Economic recession continues to put a downward pressure on average wage growth: average wage in Ukraine (not including Crimea) increased by 6.0% yoy in nominal terms but decreased by 5.6% yoy in real terms in June 2014.

    Monetary policy: CPI growth in July slowed to the lowest level over the last six months (0.4% mom) in response to seasonal factors, good harvest of vegetables, low consumer demand and several months of stable exchange rate.

    Exchange rate:In July hryvnia exchange rate was stable for the most of the month. Political instability led to slight weakening of the hrvynia vs US dollar by the end of July.

    State debt: The Ministry of Finance issued the first tranche of VAT bonds at UAH 5.7 bn to cover previous VAT refund arrears.

    Issue:  No.8 (166) August 2014
    Attached file  (357.2 kb)
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