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Pension reform approved
UKRAINE · In Brief · 03 Oct 2017

Ukrainian parliament voted in the bill on pension reform into the law. The reform presumes increase in years of service (before being vested in a pension) up to 25 years from 15 years previously (35 years by 2028). Nominal retirement age was left unchanged at 60 years. The law envisages immediate...

Spending Plan 2018: Subsidies cut, Reforms Budgeted
UKRAINE · In Brief · 20 Sep 2017

Macro-parameters are in line with our projections. Finance Ministry projects 3.0% of GDP growth (exactly what we expect), 7% consumers’ inflation (we project 6.9%) and UAH 29.3/USD (UAH 29.8/USD). Nominal GDP is expected to reach UAH 3 247.7 billion (UAH 3 217.3 billion);Budget deficit fits to th...

$3 billion Eurobonds: good news, bad news
UKRAINE · In Brief · 18 Sep 2017

Finance Ministry and President Office opened the champagne today. The Finance Ministry did a great job raising $3 billion in the open market just a few years after default. President's Office now reconciles new political prospects given that they no longer hang solely on the IMF funding. No doubt...

Draft Budget 2018 Presumes 2.4% GDP Deficit
UKRAINE · In Brief · 17 Sep 2017 · 1 response

On September 15, late in the evening the Cabinet approved draft budget 2018. Proposed spending plan presumes 15% increase in revenues (up to UAH 1.1 trillion, close to $38.2 billion), a 16.3% increase in minimum wages, and 2.4% of GDP deficit. Finance Ministry expects 3% GDP growth and 7% inflati...

David Lipton talks a lot – good sign, we believe
UKRAINE · In Brief · 16 Sep 2017

Last week the IMF's First Deputy Managing Director David Lipton visited Kyiv. He talks a lot publicly and even gives an extensive interview to local media (here is the text in English). The IMF officials never have been so talkative on my memory. He repeats key messages about pension reform, priv...

The Central bank keeps prime rate unchanged at 12.5%
UKRAINE · In Brief · 14 Sep 2017

Today the Central bank left prime rate at 12.5%. Mounting inflationary risks stand behind this decision. In August State Statistics reported deflation (CPI dropped 0.1% m/m); however, the price decline was very modest, much less than the Central bank anticipated. As a result, for 8m 2017 CPI incr...

A Storm in a Glass: Mikheil Saakashvili returns to Ukraine
UKRAINE · In Brief · 12 Sep 2017

I did not plan to disturb our readers with the story of Saakashvili return but developments appeared to be extremely noisy. So, at the end of July President Poroshenko deprived Mikheil Saakashvili, his former comrade, Ukrainian citizenship. The move did not make much sense since Saakashvili is no...

Embarking on a New Growth Cycle
UKRAINE · Report · 06 Sep 2017

The economy is performing far better than expected. Derzhstat, the statistics agency, reported a 2.4% y/y GDP increase in Q2, twice faster than we initially projected. Booming local investment — +22.5% y/y for H1 — and recovering consumption are the drivers. Remarkably, this result was achieved d...

President Poroshenko deprives Mikheil Saakashvili Ukrainian citizenship
UKRAINE · In Brief · 27 Jul 2017

It seems that silent summer has ended. Yesterday State migration service of Ukraine reported that President Petro Poroshenko deprived Ukrainian citizenship Mikheil Saakashvili, ex-president of Georgia and currently leader of opposition party ‘Movement of new forces’. The decision was justified wi...

Good but Sad
UKRAINE · Forecast · 25 Jul 2017 · 1 response

The general picture for Ukraine’s economy is both good and not so good. The economy is now in the black, and GDP grew a much better than expected 2.5% y/y in Q1 2017. Still, growth was driven by a temporary improvement in the balance of trade — a trend that shifted during April. We now expect GDP...

Ukraine puts up for sale state shares of eight electricity distributing companies
UKRAINE · In Brief · 25 Jul 2017 · 1 response

Yesterday the State property fund of Ukraine announced start of auctions on sale of state shares (25% for each company) of eight electricity distributing companies. The list for sale includes Odesaoblenergo, DTEK Dniprooblenergo, DTEK Dniproenergo, Donetskoblenergo, Donbasenergo, Sumyoblenergo, Z...

Pension reform approved in first reading
UKRAINE · In Brief · 13 Jul 2017

Today Ukrainian parliament approved pension reform bill in first reading. Put it different MPs accepted the idea of pension reform in general but details will be under revision. Among points that Minister of social policy Andriy Reva promised to consider for the second round are pension fund audi...

Land reform requirement was dropped from the IMF memorandum, anonymous source reports
UKRAINE · In Brief · 03 Jul 2017

Breaking news arrived today. Anonymous source reported that President Poroshenko asked the IMF to drop agro-land circulation from agenda and the IMF (allegedly personally Christine Lagarde) satisfied the request. Allegedly the decision was already set. I’m quite skeptical to such news but I see i...

A Victory for Naftogaz in Stockholm
UKRAINE · Report · 07 Jun 2017

A long-awaited decision by the Arbitration Institute of the Stockholm Chamber of Commerce on Gazprom’s lawsuit against Ukraine’s Naftogaz was handed down on May 31st. Many details are still unknown, but critical elements are positive for Ukraine. The panel rejected the take-or-pay provisions Gazp...

The IMF approves pension reform, the Cabinet reports
UKRAINE · In Brief · 05 Jun 2017

On June 4th the Cabinet put on its web-site scan of a letter from the IMF (see below) which states that the IMF “can support the draft law in its current form”. I do not know what ‘current form’ the IMF is talking about but in any case it’s a good signal for our cooperation with the Fund. By the ...

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