Country Insights

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Consumer inflation results with 10.0% ytd in 2021, disinflation is on tack
UKRAINE - In Brief 11 Jan 2022
Consumer inflation ended the year with 10.0% ytd or 9.4% y/y. The result is in the middle between the NBU forecast (9.6% ytd or 9.3% y/y) and our own estimate (+10.3% ytd or +9.4% y/y). Food prices (+12.7% ytd) and transportation costs (+11.1% ytd) are responsible for 2/3 of consumer inflation th...

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Russian risk and domestic drama
UKRAINE - Report 29 Dec 2021
All the diplomatic moves around tensions between Russia and Ukraine reaffirm our initial view that Vladimir Putin is just bargaining for concessions on the global level. Moscow is looking to increase its importance, but it’s highly improbable that the Russian president is prepared to become the n...

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3Q GDPgrowth revised up to +2.7% y/y
UKRAINE - In Brief 20 Dec 2021
GDP growth in 3Q 2021 was reported +2.7% y/y, up from the +2.4% y/y estimated previously, according to the Statistics Office release today. Household consumption remained strong in 3Q, with +9.0% y/y growth, as did investment in fixed assets, with +14.5% y/y growth. The key point that pulled GDP ...

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The NBU lifts policy rate by 0.5 ppt up to 9.0% amid concerns on capital outflow
UKRAINE - In Brief 09 Dec 2021
The NBU Board increased policy rate by 0.5 ppt up to 9.0%. The decision was not obvious: in polls analysts split 50/50 with near half of observers (including us) anticipated policy rate to remain unchanged. However, the decision went in line with previous communication of the NBU which articulate...

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Spending plan 2022 approved with small deficit 3.5% of GDP and conservative revenues targets
UKRAINE - In Brief 03 Dec 2021
Yesterday, on Dec 2nd, Verkhovna Rada approved spending plan 2022. The final version of the document was not released yet, some marginal revenues and spending have been added on the last moment. But the deficit target was left unchanged at the level of 3.5% of GDP. Targeted tax collections remain...

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Russia grabbing the headlines, but tapering matters more
UKRAINE - Report 30 Nov 2021
Ukraine’s economy is performing below expectations, with a disappointing 2.4% of GDP y/y growth in Q3 despite a historically bumper grain crop. To large extent, this is due to postponed harvesting, and there should be a proper upsurge in agroproduction—and GDP growth—in Q4. Still, good harvests a...

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Zelensky claims Akhmetov involved in coup d’etat
UKRAINE - In Brief 26 Nov 2021
President Volodymyr Zelenskiy gathered journalists for a press conference today. He was trying to address a series of scandals his administration has been suffering over the last several weeks, which involve the release of Bellingcat investigation on so-called Wagnergate (failed operation of Ukra...

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The IMF approves a very special decision for Ukraine
UKRAINE - In Brief 23 Nov 2021
The IMF Executive Board finally approved second review of the ongoing SBA program for Ukraine and extended the current program until end-June 2022. The completion of the review gives the green light for a $699 million wire to Ukraine. The press-release from the IMF was concise. In essence, the re...

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GDP growth misses expectations in Q3 with +2.4% y/y amid record-high grain harvest
UKRAINE - In Brief 16 Nov 2021
The state statistics office reported 2.4% y/y GDP growth in Q3. The result is far below expectations. The NBU just a few weeks ago estimated a 4.0% y/y GDP increase for the third quarter. Poor industry performance (near-zero growth through the quarter), as well as sluggish agro production (+7.2% ...

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Bloomberg reports potential Russian invasion in Ukraine: what’s going on?
UKRAINE - In Brief 12 Nov 2021
Bloomberg published an article “U.S. Warns Europe That Russia May Plan Ukraine Invasion”. The author uses really tough and even scary wording trying to give a message that “there’s no way of knowing Moscow’s true intentions” but the Kremlin is building military forces at the border of Ukraine and...

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New cabinet reshuffle: when changes change nothing
UKRAINE - In Brief 02 Nov 2021
The media wrote that already this week new people will take seats in the Cabinet. This is nothing new. We heard about inevitable replacements in the Cabinet back in June. But it took some time for the ruling group to deliver this new reshuffle. As David Arakhamia, the Head of parliamentary factio...

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Tentative IMF deal struck, as presidential popularity tumbles, and recovery wanes
UKRAINE - Report 01 Nov 2021
Autumn is traditionally intense in Ukraine, and this year is no exception. A staff-level agreement with the IMF, the Pandora Papers, the replacement of the speaker, the president’s falling ratings, and a new, more virulent wave of COVID-19 are only the most important issues. Two long-awaited e...

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The NBU keeps prime rate unchanged at 8.5%, new increase likely in December
UKRAINE - In Brief 21 Oct 2021
The NBU Board left the prime rate unchanged at 8.5%. The decision went in line with the consensus forecast. At its last communication in September the NBU made it clear that a further prime rate increase is highly undesirable. The market reflected this message at the consensus forecast despite th...

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The IMF reports Staff-Level Agreement, conditionality is not clear
UKRAINE - In Brief 18 Oct 2021
A month of online negotiations and the IMF mission finally gives an encouraging signal: a staff-level agreement and an extension of ongoing SBA Program till June 2022. However, the press-release mentions that only “Continued steadfast implementation of strong policies in these areas, consistent w...

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Stormy start of October: Pandora Papers and the dismissal of the Parliament Speaker
UKRAINE - In Brief 07 Oct 2021
The start of October appeared to be rather stormy for Ukrainian elites. The Pandora Papers as well as the removal of Parliament Speaker Dmytro Razumkov from his post have changed a lot on the Ukrainian political landscape. I do not expect immediate consequences from both events. However, in the m...