*Since 2018, the Monitor is awailable without subscription. Full version is attached.
Highlight: Budget-2019
On October 18, the Parliament approved the 2019 Draft State Budget Law in the first reading. The Ministry of Finance and the Verkhovna Rada Budget Committee succeeded to maintain key fiscal indicators rather realistic. This was difficult, as the MPs submitted more than two thousands amendments to the initial draft. If all amendments were approved fiscal spending would increase by UAH 2.2 trillion and revenues would grow by UAH 0.8 trillion. Suggested additional revenues are unrealistic as they are based on wrong assumptions, while there were no details how to finance resulting huge fiscal gap.
Executive summary
Real sector: Industrial output and construction declined in September. Households income growth supported retail sales.
Energy sector:The Ukrainian Government increased the price of gas for the households by about 23% starting November 1, 2018.
Agriculture:In September, the Verkhovna Rada adopted the Law on the deregulation in the sector of sugar production and distribution.
External sector:Current account deficit in September renewed post-2013 record for the second time in three months.
Fiscal policy: Central fiscal deficit in the first nine months of the year amounted to only UAH 7.3 bn, which was much lower than planned.
Social policy:The Government improved the ctriteria for eligibility for the housing and utility subsidies.
Labour market:The inequality of wages between sectors of economy reduced as compared to several years ago.
Monetary policy: Consumer inflation moved to 8.9% yoy in September.
Exchange rate: Interbank UAH/USD exchange rate stabilized around UAH 28 in September and remained in this range in October.
State debt:The positive signal from the IMF on the new SBA and the high need for the fiscal deficit financing pushed the Government to place Eurobonds in the end of October.
