Highlight: Unhealthy banks - IS THERE A HOPE FOR BANKING SYSTEM?
Politics: On March 11, the Executive Board of the International Monetary Fund (IMF) approved a four-year extended arrangement under the Extended Fund Facility for Ukraine in the amount of SDR 12.348 bn (about USD 17.5 bn).
Real Sector: The industrial output in Januarydropped by 21.3% yoy due to protracted military conflict in Donbas and weak demand.
Energy sector: The tariffs for gas, electricity and heating were increased in March.
Agriculture: Higher support of agriculture is expected to positively impact the sector’s development.
External sector: Current account deficit in January shrunk to USD 0.3 bn due to lower merchandise trade deficit (USD 0.4 bn).
Fiscal policy: The Parliament approved amendments to the State Budget Law to take into account new macroeconomic assumptions and changes in other legislation.
Social policy: In early March the Parliament approved changes in pension provision to reduce the deficit of the Pension Fund.
Labour market: In January average wage dropped by 17.3% yoy in real terms due to accelerated inflation and the introduction of military fee.
Monetary policy: In February, consumer inflation reached 5.3% mom, the highest level since 1996.
Exchange rate:In February, hryvnia exchange rate was very volatile and significantly depreciated.
State debt: In February, the Government provided the Deposit Guarantee Fund with a special issue of state domestic bonds at UAH 5 bn and recapitalised the Naftogaz at the account of state domestic bonds at UAH 10 bn.
