Monthly economic monitoring

  • Monthly Economic Monitor Ukraine 8-9 (213)


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    Highlight: MACRO OUTLOOK

    Over the recent weeks, the discussions on the macroeconomic outlook for Ukraine were high on the agenda taking into account high external and domestic risks. The FX payments on state debt are high for next several years, while the NBU was not able to increase international reserves to more safe level.


    Executive summary

    Politics: The negotiations between the Government and the IMF started in early September. Key topics for the negotiations included gas and heating tariffs for population, fiscal sustainability, and privatisation.

    Real sector:Real GDP grew in the second quarter by 3.8%yoy. This reflected continued growth in real consumer demand and steady growth in capital investment.

    Energy sector:The Government again postponed the decision on gas price increase for population.

    Agriculture:Between January and July, agricultural production decreased by 1.0% yoy due to decline in crop production by 1.7% yoy.

    External sector:Current account deficit reached USD 1.7 bn over the first seven months of 2018 as July current account deficit was USD 1.1 bn.

    Fiscal policy:The Government submitted the Draft State Budget Law for 2019. Targets for fiscal indicators are based on realistic macroeconomic scenario.

    Social policy: The Draft State Budget Law for 2019 envisages the increase in subsistence minimum calculated for all demographic groups in July and December by 4.5% and 4.7%, respectively.

    Labour market:Minimum wage is envisaged to increase by 12.1% to UAH 4173 in 2019.

    Monetary policy: Consumer inflation slowed to 9.0% yoy in August from 9.9%yoy in June and 13.7% yoy in December 2017.

    Exchange rate: Interbank UAH/USD exchange rate weakened from UAH 26 per USD in the beginning of Julyand passed UAH 28 per USD mark in the end of August.

    State debt:In late August, Ukraine returned to the international capital markets despite of unfavorable market conditions for public placement and suspension of the IMF financing. 


    Issue:  No.8-9 (213) August-September 2018
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