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Archive 2014

  • Monthly Economic Monitor Ukraine No.10 (168)

    13.10.2014
    Free

    Highlight: DCFTA implementation - DELAY IN DCFTA IMPLEMENTATION: TACTICAL GAIN OR LOSS?

    Politics: Regardless agreement negotiated on September 5 between representatives of Ukraine, Russia, Donbas militants, and the OSCE pro-Russian militants continued attacking Ukrainian troops in a number of places.

    Real Sector:Industrial output in August contracted sharply by 21.4% yoy mainly due to themilitary conflict in Donbas.

    Energy sector:Ukraine is engaged in three-party gas negotiations with Russia and the EU. However, the final solution on gas price, debts redemption and gas transit is still to be found.

    Agriculture:Higher grain harvest is likely to result in exports growth. However, Ukraine has already fully utilized quota granted by the EU for duty-free imports of wheat and wheat flour, as well as corn.

    External sector: Balance of payments was balanced in August due to surplus of merchandise trade andpublic sector borrowings.

    Fiscal policy: Central fiscal revenues in September dropped by 7.2% yoy. As a result, the Government had to cut discretionary spending. Overall, it will be difficult for the Government to execute the budget fully this year.

    Social policy:According to preliminary plans social standards in 2015 will be increased at a lesser extent than officially projected inflation. As a result, purchasing power of many households will reduce further.

    Labour market:Average wage in August dropped by 12.7% in real terms due to military conflict in the East, economic downturn, high fiscal pressure and acceleration of inflation.

    Monetary policy: In September prices increased for almost all categories of goods and services by 2-5% mom. This was a result of fast transmission of exchange rate volatility that started in August.

    Exchange rate: In September exchange rate of hrvynia remained volatile and fluctuated in UAH 12-15 per USD despite NBU sales of foreign currency on auctions, new rounds of administrative restrictions and direct pressure on banks.

    State debt:In September Ukraine received the first tranche of sixteen-year loan from the World Bank at USD 500 m in the framework of the first development policy loan.

    Issue:  No.10 (168) October 2014
    Attached file  (311.5 kb)
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