Archive 2016

  • Monthly Economic Monitor Ukraine No.8 (190)


    Highlight: DCFTA

    Since January 2016, the Deep and Comprehensive Free Trade Area (DCFTA) with the European Union finally became the reality for Ukraine. Establishment of the DCFTA was envisaged in the Association Agreement between Ukraine and the EU, signed in June 2014. The DCFTA resulted in the reduction of imports tariffs in Ukraine for the EU products. At the same time, Ukrainian exporters have already obtained liberalized access to the EU market under autonomous trade preferences (ATPs) in recent two years. As under ATPs Ukrainian exporters faced imports tariffs and tariff-rate quotas according to those listed for the first year of DCFTA implementation, this year tariff protection at the EU market has not change significantly. Thus, gains in 2016 are likely to be received primarily from utilization of previously unused possibilities (due to low demand in the EU, non-compliance with the EU standards), as well as further decline in non-tariff barriers to the EU market.

    Politics: The escalation of the hostilities in Donbas continued in July with Ukrainian military reporting heavy shelling and significant losses.

    Real sector: Industrial output in June declined by 3.4% yoy due to the strike on the railways on the occupied territory of Donbas, statistical base effect, and weak demand.

    Energy sector:Ukraine continues to experience difficulties with coal supplies.

    Transport:Ukraine succeeded in the liberalisation of air transportation

    Agriculture:Gross agricultural production in June increased by 2.1% yoy due to good crop harvest.

    External sector: Current account in June was in surplus at USD 0.2 bn as compared to deficit at USD 0.3 bn in June 2015.

    Fiscal policy: Growth of consolidated fiscal revenues decelerated in July due to a decline in non-tax revenues.

    Social policy: In June, the number of application for the housing and utility subsidies increased due to the implemented and planned increases in utility tariffs.

    Labour market:Growth of real average wage in June accelerated to 17.3% yoy due to the slowdown of inflation.

    Monetary policy: Consumer inflation accelerated to 7.9% yoy in July from 6.9% yoy in June.

    Exchange rate: In July, impact of reduced capital controls was likely offset by healthy export revenues.

    State debt:Over the first half of 2016, state debt increased by 6.1% in hryvnia equivalent or by 2.5% in the US dollar equivalent.

    Issue:  No.8 (190) August 2016
    Attached file  (338.6 kb)
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