We’re now sure Ukraine is uninterested in signing a new deal with the IMF. President Viktor Yanukovitch fears the political costs of an agreement, and would rather pay higher yields via private external funding than lose political points. Likely IMF representatives understand this calculation, the reason ...

Ukraine has crossed into the red by many parameters (such as the CAD and gross reserves), and under normal conditions would have already experienced many unpleasant consequences. But the world is changing: investors don’t seem to see a QE3 program running at full tilt, ailing industry, a CAD above 8% ...

The president’s family keeps strengthening its position, and gaining more influence over the media. Yet the ruling group seems to have lost control over Parliament: the opposition has been blocking it for three weeks. The IMF left Ukraine with nothing, promising to return in March. Though Ukrainian ...

Ukraine has entered into a strange state of stagnation. While something is going on, nothing has changed. There is no actual economic slump, yet improvement is unlikely. The Central Bank is keeping the hryvnia flat, but hardly anyone believes that strategy is sustainable. The Cabinet has been renewed,

Though Ukraine made it smoothly through 2012, the uncertainty isn’t over. Next year, payments due to the IMF will surge by 60%; the current account deficit will keep growing; and the Central Bank will be forced to address devaluation. Against this backdrop, smooth economic growth in 2013 will hang ...

Many investment risks have abated over the past month. Despite widespread irregularities, parliamentary elections went fairly smoothly. And an Austrian court set a precedent by deeming the “take-or-pay” scheme non-compulsory, thereby removing the potential risk of $3 billion in penalties for Naftogaz,

The 2012 parliamentary elections produced much more interesting results than any political expert could have anticipated. We are lucky so far to have avoided a new revolution, even despite the large scale fraud detected in many constituencies. There was no surprise in terms of the new master of Parliament; ...

Voting on October 28 did not bring much in the way of surprise. The only unexpected result appeared to be a sudden upsurge of ultranationalist party popularity – Svoboda, according to exit polls, gained even more than the Communist party (12.3% vs. 11.8%). If no major changes occur during the counting ...

Feared election tensions haven’t materialized – and we hope the October 28th vote won’t deliver any unpleasant surprises, such as protests or an uprising. Though lavish spending has been witnessed at all levels, the electoral outcome is still unclear: the polls accord neither the ruling group (including ...

The aura of economic stability notwithstanding, Ukrainian fundamentals are deteriorating fast, and seem unlikely to improve soon. The current account deficit widened to 7.3% of GDP by July; industrial output fell deeper into the red in August (at 0.4% for the first eight months of the year); and, over ...

Brace for fall: this typically quiet summer is just a lull. Soon, economic hardship plus campaign season stress will make for a turbulent stretch – with a very uncertain outcome. The weak harvest is the biggest front-burner news. Grain crops in July were down 20.9%, y/y. The full harvest is still ...

Though the 2012 Euro Soccer Cup was a happy and successful affair, the climate of harsh political confrontation resumed right afterward. Russia has made it clear that it won’t revise Ukraine’s gas contract in exchange for nothing. Fortunately, Ukraine has been able to raise new financing, via a surprise ...

Ukraine seems to be approaching a breaking point. The political climate in the runup to October 28th parliamentary elections promise to be tough, and may bring surprises. Brace for bumps. Currency devaluation is the first risk. Even the Euro 2012 championship failed to bolster the hryvnia; the market ...

Ukraine is sinking deeper into international embarrassment. Although the economy and currency are being desperately held together in the runup to the October 28th elections, we expect turbulence after that. The shocking April incident in which jail guards beat up incarcerated former Prime Minister Yulia ...

Despite appearances, the economy is on shaky ground. True, devaluation sentiments have calmed. Yes, the Ministry of Finance is a reporting double-digit rise in revenue collections. But the FX market has stabilized at the expense of trade credits, and with the help of new Gazprombank loans for gas payments,

Though currency crisis fears have passed, the economy is still in a risky zone: export setbacks or escalating political tensions could break the current smooth but fragile scenario. The real sector cooled faster than expected, which meant lowering the 2012 GDP forecast, to 2.6% from 3.7%. But a slightly ...

The political situation just keeps getting worse. The United States and European Union have finally begun outlining their official positions about this. PACE, the Parliamentary Assembly of the Council of Europe, threatened sanctions if Ukraine doesn’t show more progress toward democracy; in the United ...

Ukraine has still obtained no gas discount from Russia, a situation that leaves many other issues unresolved. It looks as though Moscow is not inclined to offer gas advances, and is meanwhile demanding convincing evidence that Kyiv will transfer control of the gas pipeline to Russia. Since President ...

With only a few weeks to go before the New Year, we still do not have a clear idea of how things will develop in 2012. The ruling group’s legitimacy is fading, exports are sliding, and the energy bill is likely to rise even further. Given this backdrop, 2012 economic outcomes could go either way. Now ...

Russia has at last backed Ukraine into a corner. Sandwiched between a probable currency shock and ambitions to win the parliamentary elections, the ruling group faces a difficult choice: securing a gas discount from Russia in exchange for rent-generating assets, or entering political bankruptcy by ...

The second wave of global financial crisis looks, unfortunately, to be headed for Ukraine. Although not as sudden or as drastic as in 2008, the scale of the crisis, and the fact that the first wave occurred so recently, makes everyone extremely uncomfortable. The situation is aggravated by growing ...

October 11th, 2011 may turn into a historic day for Ukraine, remembered as the date Yulia Tymoshenko was sentenced to seven years in prison. This could be interpreted as much more than personal revenge. If the verdict is really carried out (an appeal and/or legislative change could still alter the outcome),

Ukraine’s “gas dispute” with Russia has been the top local story this month. Though the half-empty threats the two sides have exchanged (to shut the pipeline; to shut Naftogaz, to cite just two), this may be the most sophisticated talk between the two countries through the post-independence history....

Despite this year’s impressive grain harvest, the domestic economy still faces plenty of uncertainty, linked to gas imports and the outlook for grain exports. The risk of another global recession also raises many questions about the development path of Ukraine, and the region. Nonetheless, for the ...

Growing domestic problems notwithstanding, the U.S. deficit and ratings crises are topping the headlines in Ukraine. The prospect revisiting the hardships experienced here in 2008 leaves Ukrainians nervous and disoriented. Ukraine’s small, open, and export-oriented economy closely tracks shifts in ...