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Monthly economic monitoring

  • Monthly Economic Monitor Ukraine No.5 (199)

    23.05.2017

    Highlight: Custom reform

    The Ministry of Finance proposed to reform of customs in Ukraine with the aim of better transparency and predictability. The model of the reform and changes in custom procedures is currently debated between the Ministry of Finance and the representatives of the Parliament and the civil society. The reform will hopefully be implemented by the end of 2017.

    The survey of exporters and importers conducted by the IER indicates that the custom reform is badly needed as custom regulation hampers trade growth.1 Only 13% of exporters and importers think that work of custom services is efficient, while 43% of companies state that radical custom services reform is required. Importers demand the reform of custom services more often than exporters. The problems with custom procedures seem also to be higher for smaller companies. 

    Politics:The decision of the United Nations International Court of Justice in April requires the introduction of measures to protect the rights of Ukrainians and Crimean Tatars in the Autonomous Republic of Crimea.

    Real sector:The suspension of trade with the Eastern Donbas controlled by Russian-backed separatists decreased industrial production.

    Energy sector: Ukrainian and EU companies will conduct the joint assessment of the possibility to use and develop the Ukrainian gas transportation system.

    Agriculture:In the first quarter of 2017, the agricultural production declined by 0.8% yoy.

    External sector:Current account deficit reached USD 0.8 bn in March as semi-annual payment of interest on restructured sovereign Eurobonds resulted in higher net outflows of income.

    Fiscal policy: In April, Ukraine confiscated an estimated USD 1.3 bn of assets, which were stolen by the ousted former President Viktor Yanukovych and his associates.

    Social policy: The promised by the Government pension reform is expected to increase average retirement age by increasing required number of years in employment, creating incentive for later retirement etc.

    Labour market: Average wage in March surged by 37.2% yoy in nominal terms and by 18.7% yoy in real terms due to increase in minimum wage since January.

    Monetary policy: Consumer inflation slowed to 12.2% yoy in April reflecting high statistical base.

    Exchange rate: Interbank foreign exchange market remained calm in April.

    State debt:Domestic debt continues growing due to new placement of domestic bonds and recapitalization of state-owned banks.

    Issue:  No.5 (199), May 2017
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