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UKRAINE - MACROECONOMIC SITUATION – APRIL 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
Published by U.S.-Ukraine Business Council (USUBC),
Washington, D.C., Thu, May 10, 2018
WASHINGTON, D.C. - The "Ukraine Macroeconomic Situation – April 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.
- On April 30, the Ukrainian authorities terminated the four-year old Anti-Terrorist Operation (ATO). It was replaced the Operations of the United Forces (OUF) which will be under the Defense Ministry of Ukraine and ultimately will report to the President of the Country. The OUF will be the main authority managing the military operations in Donetsk and Luhansk regions. The new status of operation emphasizes the military nature of the conflict and just not anti-terrorism as it was in the past.
- In April, the Cabinet of Ministers introduced a flat international-parity tariff for gas used by non-household consumers. Therefore, discretionary selectivity in gas tariffs for different groups of business consumers was fully eliminated.
- In March 2018, the Ukrainian economy continued its recovery, but at a slow and uneven pace. Ukraine's industrial production increased by 1% yoy, compared to the same month of previous year. Ukraine also experienced a growth rate of 7.6% yoy in retail trade turnover, and 3.3% yoy in passenger turnover. On the other hand, Ukrainian construction output continues to perform poorly, with a decline of -4.3% yoy, or twice the fall of -2.3% yoy in February 2018. Moreover, following an increase of 3.4% yoy in February, Ukrainian manufacturing output shrunk significantly by -4.6% yoy in March 2018.
- The state budget was executed with a deficit of UAH 18.9 billion in March 2018, due to faster increases in expenditures than in revenues. Local budgets, in turn, were executed with a surplus of UAH 0.7 billion. Therefore, the cumulative consolidated budget balance from the beginning of the year turned negative at UAH 3.0 billion.
- Consumer inflation declined slightly in February to 13.2% yoy.
- In the banking sector, both national and foreign currency deposits expanded in March 2018, though at a lower rate than in February. Lending activities of commercial banks showed mixed results, with expansion in Hryvnia lending but with negative growth in foreign exchange lending.
- The UAH/USD exchange rate remained stable in April, ending the month at around 26.2 UAH/USD.
- In March 2018, the current account of the balance-of-payments had a deficit of USD 763 million, compared to a deficit of USD 509 million in March 2017. The increase in the current account deficit was due to a higher deficit in Primary Income and despite the fact that the deficit in trade of goods and services (USD 619 million) had remained relatively stable. International reserves amounted to USD 18.2 billion.
NOTE: The entire Macroeconomic Situation Report for April 2018 can be found at the link below: Ukr_Monthly_Ec_Report_April_2018.pdf