Highlight: Association Agreement
Politics: On July 1, President Petro Poroshenko submitted to the Parliament a bill to amend the Constitution, which provides a framework for decentralization of power in Ukraine.
Real Sector: Real GDP in the first quarter of 2015 declined by 17.2% yoy due to sharp reduction of domestic demand.
Energy sector: Gas negotiations between Ukraine, the EU and Russia held on June 30 were unsuccessful as the consensus between the Naftogaz and the Gasprom on gas price was not reached.
Agriculture:Decline in gross agricultural production in May accelerated to 7.3% yoy.
Privatisation: More companies were added to the list for privatisation, but sale at fair prices is doubtful.
External sector: Balance of payment in May was in surplus due to balanced current account and positive balance of financial and capital account.
Fiscal policy: Consolidated fiscal surplus in the first five months of the year widened further to UAH 19.4 bn (as compared to deficit of UAH 8.0 bn in the same period of 2014).
Social policy: In the first quarter of 2015, real disposable income dropped by 23.5% yoy due to sharp acceleration in inflation.
Labour market:Unemployment rate (ILO methodology) in the first quarter of 2015 was at 9.6% of economically active population in the age between 15 and 70 years old.
Monetary policy: In June, monthly core inflation was at 0.4% mom, the lowest level since the 2014 crisis started.
Exchange rate: In June, interbank exchange rate continued to fluctuate in the UAH 21-22 per USD range with the help of the NBU.
State debt:In June, the Cabinet of Ministers amended the Statute of the Naftogaz to increase company’s statutory capital by almost three times
