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UKRAINE - MACROECONOMIC SITUATION – MARCH 2018
ANALYTICAL REPORT: by Oleg Ustenko, Djulia Segura, Valentyn Povroznyuk, Edilberto L. Segura
SigmaBleyzer private equity investment management firm & The Bleyzer Foundation (TBF), Kyiv, Ukraine
LINK:UKR_MONTHLY_EC_REPORT_MARCH 2018 V1.PDF
Published by U.S.-Ukraine Business Council (USUBC),
Washington, D.C., Thu, April 5, 2018
WASHINGTON, D.C. - The "Ukraine Macroeconomic Situation – March 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 -- (entire report with charts and graphs found in the attachment)
(1) The Normandy Contact Group issued a resolution to introduce a ceasefire in Donetsk and Luhansk prior to the Orthodox Easter. This is a first time when the Russian leadership publicly supported a
ceasefire in Ukraine.
(2) The National Bank of Ukraine liberalized the exchange rate regime and reduced barriers to capital movement. This long overdue liberalization sends positive signal for investors.
(3) Ukraine and Israel agreed to sign a bilateral Free Trade Agreement in the nearest future. The negotiations for this deal were finalized in March.
(4) According to the latest release of the State Statistics Committee, the economic performance of Ukraine has continued to improve. In fact, real GDP grew by 2.5% in 2017, as we had originally
predicted, compared to 2.3% in 2016. The mayor sources of GDP growth were gross capital formation, which increased by 9% yoy, household consumption, which increased by 7.8%, and
government expenditures, which grew by 3.3% yoy.
(5) High-frequency data show that economic performance was satisfactory in February, with retail trade turnover increasing by 5.6% yoy, passenger turnover increasing by 3.7% yoy, and manufacturing
increasing by 3.4% yoy. Within industrial manufacturing, the largest increases took place in the following sub-sectors: chemicals (43.1% yoy); furniture (16.6% yoy); coke and refined petroleum (6.3%
yoy); engineering (5.9% yoy); metals (4.6% yoy); wood (4.2% yoy); and pharmaceutical products (1.9% yoy).
(6) The cumulative consolidated fiscal budget surplus (state and local) from the beginning of the year amounted to UAH 15.3 billion.
(7) Consumer inflation declined slightly in February to 14.0% yoy.
(8) In the banking sector, both national and foreign currency deposits expanded in February. Lending activities of commercial banks have also improved.
(9) The UAH/USD exchange rate appreciated by around 2.1% in March ending the month at around 26.23 UAH/USD.
(10) The current account of the balance-of-payments of Ukraine was close to equilibrium, with a small USD 9 million surplus, compared to a USD 133 million deficit in February 2018. The financial
account also had net inflows of USD 243 million, compared to USD 102 million in February 2017. The major inflow were due to a trade credits (USD 453 million). As a result, the surplus of the
overall balance of payments amounted to USD 252 million. This surplus allowed to increase its international reserves to USD 18.4 billion (3.6 months of imports).
NOTE: The entire Macroeconomic Situation Report for March 2018 can be found at the link below: UKR_MONTHLY_EC_REPORT_MARCH 2018 V1.PDF