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Gross international reserves plunged 23.2% down to $12.6 billion in October
UKRAINE · In Brief · 10 Nov 2014

In October gross international reserves plummeted by $ 3.8 billion down to $12.6 billion, the Central bank reported on Nov. 7. The decline appeared much stronger than expected. We recognized that $1.6 billion redemption on Naftogaz Eurobonds and state debt redemptions (including $233 million to t...

Ukraine accepts Gazprom demands and signs ‘winter’ gas supplies contract with Russia
UKRAINE · In Brief · 31 Oct 2014

Yesterday trilateral agreement for gas supplies till the end of March 2015 between Ukraine, Russia and EU was signed in Brussels. Kyiv accepted Gazprom demand to treat the suggested prices as “price with $100 discount”. Actual gas price will be $378 per tcm till the end of 2014 and $365 per tcm i...

Strong grain harvest prevents 3Q 2014 GDP from deep fall
UKRAINE · In Brief · 31 Oct 2014

In 3Q 2014 Ukraine’s GDP performed much better than we expected. In particular, the State Statistics Service reported 5.1% y/y GDP decline last quarter (we estimated -11.2% y/y). For nine months GDP fell 3.8% y/y according to our estimates. Stronger agro-production performance (+23.9% y/y in 3Q 2...

Edge of the Precipice
UKRAINE · Report · 28 Oct 2014

Executive SummaryAs the armed conflict has calmed down, parliamentary elections have brought in a pro-reformist coalition, and important reforms (such as a series of anti-corruption measures) have been launched. Some positive developments are in the making. At the same time, we continue to see ma...

Exit-polls: Pro-Reformist Majority Looks Secured
UKRAINE · In Brief · 26 Oct 2014

The voters, which were indecisive (near 1/3 of voters), indeed delivered surprises. Block of Petro Poroshenko was reported only slightly above "Narodny front" (Arseniy Yatsenyuk). "Sylna Ukraina" of Sergey Tigipko is out. Communist party also did not pass 5% barrier. At the same time "Samopomitch...

Updated Survey Results: Poroshenko Leads, Some Changes in Support of Other parties
UKRAINE · In Brief · 23 Oct 2014

Yesterday fresh sociology was released on political parties’ ratings. In general the picture did not change much for Block of Petro Poroshenko as well as for Radical party of Oleg Liashko; however, we see significant changes in support of other parties. In particular, it looks like Arseniy Yatsen...

Parliament Elections 2014: Presidential Majority Looks Secure
UKRAINE · Report · 21 Oct 2014

Next weekend (October 26) Ukraine will conduct early parliament elections.To a large extent all surveys give strong political support to the Bloc of Petro Poroshenko; however, it is unclear with whom he will be comprising his alliance. Many voters (including ourselves) have not decided for whom t...

Navigating a Cold Peace
UKRAINE · Forecast · 01 Oct 2014

The “Truce treaty” with the separatists has left Ukraine in a very unclear position. On one hand, President Petro Poroshenko says this step was crucial to halting further Russian advances into Ukrainian territory (though the Russian Army’s heavy casualties were probably the real reason). On the o...

Ukraine’s public debt breaks 60% of GDP ceiling
UKRAINE · In Brief · 29 Sep 2014

In August public debt grew 12.9% m/m up to UAH 945.8 billion ($69.5 billion) which is near 63% of GDP (our estimate of GDP). Refunding of Naftogaz (UAH 46.7 billion) as well as new wave of hryvnia weakening were the key reasons for fast state debt growth through the month. Though this result was ...

Donbas special status law – will it end the war?
UKRAINE · In Brief · 16 Sep 2014

Today the parliament voted in law on special status of Donbas. With this law Ukraine approves Transnistria-style gray zone on its territory. From this law we do not have clear vision how relations will be organized but very likely Ukraine will pay some money from the budget for maintenance of the...

‘Cease-fire’ play
UKRAINE · In Brief · 05 Sep 2014

Ukrainian authorities signed cease-fire agreement with separatists. The main question for how long that will last. In our opinion it has poor chances even to start. From the info we see one of the main conditions was withdrawal of Russian military from eastern Ukraine. That could hardly happen be...

Donetsk encirclement unlocked. Russian regular squads enter the city.
UKRAINE · In Brief · 01 Sep 2014

Situation at the eastern front has aggravated over the last few days. Russian army made a decisive move from south to cut off Ukrainian forces from supplies what made Ukrainian regular army to retreat. Unfortunately, several volunteer battalions have been encircled and totally destroyed – hundred...

Russian intervention officially recognized
UKRAINE · In Brief · 28 Aug 2014

President Petro Poroshenko today spoke to Ukrainians and officially recognized that Russian troops invaded Ukraine. In fact, it was nothing new for everyone; however, after many western observers finally recognizing the fact of Russian invasion Poroshenko also had to do this. Situation aggravated...

War Aggravates Economic Problems
UKRAINE · Report · 26 Aug 2014

Executive Summary Intensified fighting around Donetsk and Luhansk triggered a 12.1% y/y industrial output slump in July.The Luhansk oblast reported a 56% y/y decline in industrial production, while the Donetsk oblast’s output fell 28.5% y/y that month.In August, military forces intensified their ...

President dissolves Parliament; early elections appointed for October 26
UKRAINE · In Brief · 26 Aug 2014

Yesterday late at night President Petro Poroshenko dissolved the parliament. New elections have been appointed for October 26. The decision was in line with legislation since a month ago ruling parliament coalition stopped its activity. This step was widely expected in society since many MPs from...