Monthly economic monitoring

  • Monthly Economic Monitor Ukraine No.4 (198)


    Highlight: The IMF

    On April 3, the IMF Executive Board concluded 2016 Article IV Consultationwith Ukraine (IMF biannual macroeconomic surveillance) and completed the Third Review of Ukraine’s EFF program. As a result, Ukraine received USD 1 bn disbursement, which was originally scheduled for November 15, 2016. Initially, the disbursement was delayed due to late approval of the State Budget Law and amendments to the Tax Code and failure of the Government to deliver on a number of other reforms promised after the Second Review of the EFF program concluded in October 2016. On March 20, the Executive Board meeting was postponed as the embargo on trade with the non-government controlled areas in the East of Ukraine was imposed leading to changed macroeconomic outlook. The forecast of real GDP growth was downgraded to near 2% and projected current account deficit was increased to 3.7% of GDP. Ukraine’s real GDP is forecasted to grow by 3.2% in 2018.

    Politics:The National Anti-Corruption Bureau and the Special Anti-Corruption Prosecutor’s Office charged Roman Nasirov, the head of the State Fiscal Service of Ukraine, with an abuse of powers.

    Real sector: In 2016, real GDP grew by 2.3% due to increase in domestic demand.

    Energy sector: The lack of coal caused electricity producers to import coal and the National Energy and Utilities Regulatory Commission (NERC) increased the price of coal used for calculation of electricity tariffs.

    Agriculture: As of March 31, 1.2 m hectares of early grain and leguminous crops were sowed (51% of planned area).

    External sector:Current account deficit widened to USD 0.40 bn in February due to increase in merchandise trade deficit.

    Fiscal policy: According to the preliminary information of the State Treasury, in the first quarter of 2017, consolidated fiscal revenues increased by 35.6% yoy due to higher tax and non-tax revenues.

    Social policy: In 2016, disposable income increased by 14.2% in nominal terms due to higher income from all major sources.

    Labour market: Average wage in February grew by 35.4% yoy in nominal terms and 18.0% yoy in real terms due to minimum wage increase.

    Monetary policy: Consumer inflation surged to 15.1% yoy in March.

    Exchange rate: Interbank UAH/USD exchange rate in March fluctuated near UAH 27 per USD as high export prices offset impact of Donbas blockade on export revenues.

    State debt:In the first days of April, Ukraine received USD 1 bn from the IMF under the EFF and EUR 600 m from the European Union as macro-finance assistance.

    Issue:  No.4 (198), April 2017
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