Monthly economic monitoring

  • Monthly Economic Monitor Ukraine No.8 (202)


    Highlight: Ryanair

    On July 10, 2017, Ryanair, the largest low-cost airline in Europe, announced that it cancels its plans to enter Ukraine due to the failure to agree the contract with Boryspil airport. The decision was a negative blow to the image of Ukraine aiming to prove that the country is open and friendly to foreign investors. However, the analysis shows that the situation is not straightforward, and all involved parties seem to share the responsibility for the failure of the talks. Below, we list some of the still open questions.


    Politics:The Canada-Ukraine Free Trade Agreement came into force on August 1, 2017. In September, the full-scale implementation of the Association Agreement between Ukraine and the EU will start.

    Real sector: Industrial production growth accelerated to 3.8% yoy in June in part due to the statistical base effect.

    Energy sector: The National Energy and Utilities Regulatory Commission adopted the rules for tariff setting on thermal energy transportation using the regulatory asset base (RAB) approach.

    Agriculture: In June, the agricultural production declined by 2.1% yoy due to decline in both crop and livestock production.

    External sector:In June, merchandise trade deficit reached USD 0.81 bn, one of the highest values since 2014.

    Fiscal policy: In July, the Parliament increased by plan of central fiscal revenues for 2017 by 5.4% to UAH 771 bn and not to UAH 757 bn as it was suggested by the Government.

    Social policy: The pension reform that envisages changes on the solidarity pension pillar was approved in the first reading.

    Labour market: Average wage in June grew by 37.9% yoy primarily due to increase in minimum wage.

    Monetary policy: Consumer inflation accelerated to 15.9% yoy in Jul driven by growing food prices..

    Exchange rate: Interbank UAH/USD exchange rate returned to below UAH 26 per USD in July for the first time since December 2016.

    State debt:In the first half of 2017, state debt increased by 1.4% in hryvnia equivalent to UAH 1 958 bn.


    Issue:  No.8 (202) August 2017
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