Country Insights

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Spending plan 2022
UKRAINE - In Brief 17 Sep 2021
On September 15, MinFin submitted spending plan 2022 to the parliament, and yesterday it was finally released to the public. We saw nothing extraordinary in the proposed spending plan. However, there are several points we want to highlight for our readers. The proposed spending plan was developed...

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The NBU increases prime rate by extra 0.5 ppt up to 8.5%
UKRAINE - In Brief 09 Sep 2021
The NBU Board increased the prime rate by an extra 0.5 ppt up to 8.5%. The decision was widely expected as the NBU itself mentioned a likely prime rate revision up to 8.5% if inflation trends remain strong. In the meantime, CPI was reported declining seasonally by 0.2% m/m in August amid eased fo...

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Joint statement on strategic partnership sounds good
UKRAINE - In Brief 02 Sep 2021
President Volodymyr Zelenskiy finally met US president Joe Biden. Ukrainian authorities have been striving to get the meeting for so long that the very fact of the talk is being presented as a big success. The President's Office, predictably, broadcast multiple important agreements the Ukrainian ...

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Growth robust for now, but tapering may hurt
UKRAINE - Report 20 Aug 2021
H1 2021 was marked by poor economic performance, as industrial output stagnated along with contracting agro-production following poor harvests in 2020. GDP recovered in Q2 by a modest 5.4% y/y, after plunging 11.2% y/y a year ago. Yet there was a strong revival in private consumption, as retail t...

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The IMF mission to arrive in September, Kristalina Georgieva says
UKRAINE - In Brief 29 Jul 2021
Ukraine’s President Volodymyr Zelenskiy had a phone call with Managing Director of the IMF Kristalina Georgieva yesterday on July 28. Kristalina Georgieva recognized “sound economic progress made under the IMF program” and mentioned the IMF mission arriving in September. The President Office ment...

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Minister of economy designates the course: fiscal and monetary expansion are defined as priority as well as protectionist measures
UKRAINE - In Brief 27 Jul 2021
There is one thing I can hardly pass by. Yesterday Vice-Prime Minister and Minister of economy Oleksiy Lyubchenko published a series of articles (in different media, see the links, describing his economic views and also outlining the course for Ukr...

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Belated prime rate increase: up to 8.0%
UKRAINE - In Brief 22 Jul 2021
The NBU Board increased primed rate by 0.5 ppt up to 8.0%. That happened despite monthly inflation slowed down to +0.2% m/m (+9.5% y/y) in June from +1.3% m/m (+9.5% y/y) in the prior month. From the press-release it’s not clear why the NBU woke up so late, not a month ago. But as we see, the mon...

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Breakthrough with judicial reform: parliament approves reboot of the High Council of Justice
UKRAINE - In Brief 15 Jul 2021
We are witnessing a real breakthrough with judicial reform. We wrote previously that on June 29th parliament gave green light for reload of the High Qualification Commission of Justice (HQCJ) with dominating role of international experts in selection of the HQCJ members. The HQCJ is like an HR de...

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New land market, seesawing IMF relations and inflation-driven recovery
UKRAINE - Report 13 Jul 2021
The launch, at long last, of a farmland market in Ukraine was probably the most remarkable event of the past month. The law was passed a year ago but has only now come into effect. Many political players have been trying to derail this reform, and Ukrainians were never certain that the market wou...

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True progress in judicial reform
UKRAINE - In Brief 30 Jun 2021
On June 29, we witnessed a truly pivotal event. For sure, it was not as important as Ukraine passing into the Euro 2020 quarter-finals. Nevertheless, real progress in judicial reform was long-awaited and is badly needed both for the country's development and our good relations with the IMF. On Ju...

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The NBU leaves prime rate unchanged at 7.5% despite soaring inflation
UKRAINE - In Brief 17 Jun 2021
The NBU Board decided to leave prime rate unchanged at 7.5% despite dramatic inflation speed up (in May CPI went up by 9.5% y/y and PPI surged to +33.1% y/y). The decision went in line with our reading of the NBU policy though we see this decision as a mistake. Press-release of the NBU tells abou...

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Consumer inflation speeds up to 9.5% y/y in May
UKRAINE - In Brief 10 Jun 2021
In May inflation sped up to +1.3% m/m or +9.5% y/y from +0.7% m/m or +8.4% y/y in April. Stronger food prices (+1.7% m/m from +1.2% m/m in April) as well as jump in utilities’ tariffs (+3.9% m/m from +0.4% m/m in April) are the main drivers of consumer inflation with foods adding 0.74 ppt (out of...

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The 140th attention-grabbing ploy, amid a strong economy
UKRAINE - Report 08 Jun 2021
We’re all doomed to watch President Volodymyr Zelenskiy’s latest TV project, called “The National Security Council.” Every Friday, journalists and observers are obliged to set aside time to find out what the producers in the Office of the President have generated for the nation’s viewers this tim...

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Three ministers out: big cleaning on the eve of second anniversary in power
UKRAINE - In Brief 19 May 2021
Yesterday, on May 18th, Verkhovna Rada dismissed three ministers: Minister of Infrastructure, Vladyslav Krykliy; Minister of Economic Development, Trade and Agriculture Igor Petrashko; and Minister of Healthcare, Maxym Stepanov. This reshuffle is merely the result of infighting between interest g...

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Inflation makes things go up and down
UKRAINE - Report 10 May 2021
Inflation has become the main issue in 2021, and does not bode well for Ukraine’s growth prospects: industrial output fell in Q1, despite soaring export prices. However, galloping prices reduced pressure on fiscal accounts, adding extra inflationary revenues. What’s more, soaring resource prices,...