Archive 2016

  • Monthly Economic Monitor Ukraine No.10 (192)


    Highlight: BUDGET 2017

    The Government submitted the Draft State Budget Law for 2017 to the Parliament on September 15, 2016, which is the deadline in the Budget Code. There are some grounds to expect the budget process will move smoothly and will be approved by the end of November. So far, the Ministry of Finance actively engaged in discussions on fiscal parameters, while members of parliament as usual are trying to outdo each other in finding fault with some or all aspects of the proposed Budget.

    Politics: The IMF Executive Board completed the second review of Ukraine’s economic program supported by the arrangement under the Extended Fund Facility and approved disbursement of the USD 1 bn loan.

    Real sector: Real GDP growth accelerated from 0.1% yoy in the first quarter 1.4% yoy in the second quarter of 2016 due to increase in domestic demand.

    Energy sector:On September 22, the Verkhovna Rada approved the Law on the National Energy and Utilities Regulatory Commission, which was required by experts and international donors.

    Agriculture:Gross agricultural production in August decreased by 0.9% yoy due to decline in dairy and egg production.

    External sector: Current account in August was in deficit at USD 0.4 bn as compared to balanced current account in August 2015 due to higher merchandise trade deficit.

    Fiscal policy: Consolidated fiscal revenues in September increased by 6.4% yoy. The NBU was still not able to transfer the profits to the budget due to prolonged delay in forming NBU Council.

    Social policy: Disposable income in the second half of 2016 increased by 14.3% yoy in nominal terms due to higher revenues from all sources.

    Labour market: Labour market situation stabilised, which is reflected in rather stable unemployment rate and higher wages.

    Monetary policy: Consumer inflation slowed to 7.9% yoy in September from 8.4% yoy in August.

    Exchange rate: The NBU helped reduce volatility on the foreign exchange market by selling USD 178 m.

    State debt:The approval of the Second Review of the IMF Program enabled the Government to place U.S.-guaranteed bonds at the lowest interest rate.

    Issue:  No.10 (192) October 2016
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