Off the Cliff

UKRAINE - Report 25 Feb 2015 by Vladimir Dubrovskiy and Dmytro Boyarchuk

Executive Summary

Ukraine’s situation has deteriorated. Despite widely expected budget cuts, which should have secured a stable hryvnia, the authorities have envisaged an overoptimistic spending plan for 2015, which presumes heavy hryvnia printing. To make matters worse, it sounds as though the IMF has given its blessing to this misadventure, though it has promised only limited financing. Perhaps more encouraging details of the IMF deal will be released later on.But, based on current info, we believe the authorities have created a situation that all but guarantees hyperinflatio...

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