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COUNTRY INSIGHTS

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 https://cutt.ly/RQtKuzc, https://cutt.ly/mQtNYrt) describing his economic views and also outlining the course for Ukr...

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...

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...

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...

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...

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...

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...

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...

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...

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,...

Naftogaz CEO Andriy Kobolev replaced with his ex-colleague Yuriy Vitrenko, one more concern for the IMF prospects
UKRAINE · In Brief · 29 Apr 2021

We have another discouraging piece of news from our leadership. The Cabinet fired CEO of Naftogaz Andriy Kobolev, openly ignoring the independence of the supervisory board of the company. The Cabinet leveraged a legal trick to remove Kobolev. The head of the management board could be fired only w...

Ukraine issues $1.25 billion Eurobonds amid withdrawal from local securities
UKRAINE · In Brief · 27 Apr 2021

MinFin is in progress of placing $1.25 billion Eurobonds with 6.875% yield according to Interfax news agency. We did not expect the authorities to start placement that early given “no progress with the IMF”. However, dried up inflow of foreign cash into local bonds and even withdrawal of non-resi...

Prime rate goes up to 7.5%, the NBU signals preference to keep this level till 2022
UKRAINE · In Brief · 15 Apr 2021

As expected, the NBU Board increased the prime rate by 1.0 ppt up to 7.5% amid a substantial inflation speed up to 8.5% y/y in March. The NBU revised its inflation forecast up to 8% for 2021 from 7%, estimated previously. Also the Bank worsened GDP forecast down to +3.8% from +4.2%, estimated pre...

Consumer inflation breaks 8% ceiling, further prime rate increase looks inevitable
UKRAINE · In Brief · 10 Apr 2021

Our CPI estimate for 2021 was one of the most pessimistic among forecasting agencies. Still the reality appeared to be even more relentless. In March CPI sped up to 1.7% m/m (we projected 1.2% m/m) and touched 8.5% year-on-year. For 3m 2021 consumer inflation reached +4.1% ytd. Soaring food price...

Enemy at the Gates: Russia shows muscle on the border of Ukraine
UKRAINE · In Brief · 08 Apr 2021 · 1 response

Over the recent weeks we have seen regular reports about the growing number of Russian troops on the border of Ukraine. That was a logical and quite predictable development after Joe Biden called Russian President Vladimir Putin a “killer” and after Ukrainian President Volodymyr Zelenskiy ambushe...

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