Archive 2014

  • Monthly Economic Monitor Ukraine No.9 (167)


    Highlight: NBU policy - WHERE THE NBU IS GOING

    Politics: Russian invasion of Ukraine was condemned by most developed nations. The conflict is expected to be long-lasting.

    Real Sector: Military conflict in Donbas resulted in sharp contraction of industrial output in July by 12.1% yoy as many companies of the region had to stop operation.

    Energy sector:Ukraine might have problems with energy supplies in autumn and winter as storages of natural gas and coal might be insufficient.

    Agriculture: The Parliament approved several laws, which are likely to expand access for Ukrainian agricultural producers to the EU market.

    External sector: Merchandise trade deficit in July narrowed to USD 0.2 bn. Services trade balance also turned negative at USD 0.1 bn due to lower foreign tourists inflow to Ukraine.

    Fiscal policy: Legislative changes approved in March and July ensured increase in central fiscal revenues by 8.9% yoy in the first eight months of 2014. Still, revenues and deficit remained lower than targets, which resulted in under-execution of expenditures.

    Social policy:The Government plans to continue pension reform in the nearest future to restrict growth in central fiscal transfer to the Pension Fund.

    Labour market: In July, average wage grew by only 2.6% yoy in nominal terms and dropped by 8.9% in real terms.

    Monetary policy: In August, consumer inflation reached 14.2% yoy due to increase in prices for transport, pharmaceuticals, housing, water, electricity, gas and other fuels.

    Exchange rate: In August, hryvnia weakened sharply from UAH 12 per USD to UAH 14 per USD. As a result, the NBU introduced harsh administrative measures to support national currency.

    State debt: State debt in 2014 is estimated to reach near 60% of GDP.

    Issue:  No.9 (167) September 2014
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