WASHINGTON, D.C. - The "Ukraine Macroeconomic Situation – July 2018" analytical report with several charts and graphs can be found at the link below.  The monthly Macroeconomic Situation report is prepared by the SigmaBleyzer multinational private equity firm, www.SigmaBleyzer.com, and The Bleyzer Foundation (TBF), www.BleyzerFoundation.org, Kyiv, Ukraine, who are long time members of the U.S.-Ukraine Business Council (USUBC), http://www.USUBC.org.  

Executive Summary

  1. In July, the Verhovna Rada passed amendments to the Anti-Corruption Court Law according to which all ongoing cases of the National Anticorruption Bureau will be transferred to the new Anticorruption Court. This amendment was required by the IMF Program and should ensure renewed international financial support.
  2. The IMF has indicated that an IMF mission will be visiting Kyiv from September 6 to September 19, to discuss recent economic developments and next steps, including further financial assistance from the IMF.
  3. In July President Poroshenko participated in the 2018 Brussels Summit of the North Atlantic Treaty Organization (NATO), which was attended by heads of government of NATO members. The final declaration signed by all member-states re-confirmed NATO support to Ukraine in its efforts to maintain the country’s territorial integrity.
  4. The most recent monthly data for June 2018 shows that the economy is continuing its recovery. In fact, in June agricultural production climbed by 36% yoy, following a 2.6% yoy increase in May.  The industrial sector continued to growth, but at a more moderate rate of 2.2% yoy. Retail trade turnover continued to show improvements, with a growth rate of 5.8% yoy in June 2018, thanks in part to increases in real monthly wages of 13% yoy.
  5. In June both the central and local governments incurred budget deficits, which led to a consolidated budget deficit of UAH 4.2 billion for the month. Nevertheless, from the beginning of the year, the cumulative consolidated budget balance remained positive at UAH 10.4 billion in the first half of 2018 (a surplus of 0.3% of period GDP).
  6. Consumer inflation posted a significant deceleration for the second consecutive month in June. The all items index dropped 1.8 percentage points to 9.9% yoy.
  7. The UAH/USD exchange rate depreciated starting in mid-July and was triggered by expanded hryvnia resources in the FX market because of repayment of bonds denominated in Hryvnia and several tranches of VAT reimbursements. It also was supported by increased demand for dollars by non-resident banks for dividend repatriation purposes.
  8. In June 2018, the current account of the balance of payments incurred a deficit of USD 125 million (1.2% of period GDP), following a small surplus of USD 37 million during the second quarter of 2018. The June deficit took place despite the fact that exports of goods increased by 11.5% yoy, a larger increase than the 9.9% rise of imports of goods.  Nevertheless, financial inflows of USD 148 million led to an overall balance of payments surplus, with international reserves remaining at USD 18 billion.



  9.  

    Main Macroeconomic Indicators

    2012

    2013

    2014

    2015

    2016

    2017

    2018f

    GDP, USD billion

    173

    180

    130

    87

    93.4

    113

    125

    Real GDP Growth, % yoy

    0.2

    0.0

    -6.6

    -9.9

    2.4

    2.5

    3.5

    Fiscal Balance (incl. Naftogaz/Pension Fund),% of GDP

    -5.5

    -6.5

    -11.7

    -2.1

    -2.3

    -1.4

    -2.5

    Public Debt, External and Domestic, % of GDP

    36.6

    40.4

    69.4

    79.1

    80.9

    71.8

    67.5

    Consumer Inflation, eop, % yoy

    -0.2

    0.5

    24.9

    43.3

    12.4

    13.7

    9.0

    NBU Key Policy Interest Rate, % eop

    7.5

    6.5

    14.5

    17.0

    16.7

    16.4

    17.0

    Hryvnia Exchange Rate per USD, eop

    8.1

    8.2

    15.8

    24.0

    27.1

    28.1

    28.0

    Current Account Balance, % of GDP

    -8.3

    -9.2

    -3.5

    1.8

    -1.9

    -2.5

    -3.0

    Merchandise Exports, USD billons

    64

    59

    51

    35

    34

    40

    43

    Merchandise Imports, USD billions

    86

    81

    58

    39

    40

    49

    52

    FDI, Net Annual Inflow, USD billion

    8.4

    4.5

    0.4

    3.0

    3.3

    2.3

    5.0

    International Reserves, USD billion

    24.5

    20.4

    7.5

    13.3

    15.5

    18.8

    21.0

    Public External Debt, USD billion

    32.1

    31.7

    34.9

    42.6

    42.5

    47.0

    52.0

    Private External Debt, USD billion

    102.3

    110.3

    91.2

    76.0

    69.9

    70.0

    72.0

    NOTE:  The entire Macroeconomic Situation Report for June 2018 can be found at the link below: Ukr_Monthly_Ec_Report_July_2018.pdf