UKRAINE - MACROECONOMIC SITUATION REPORT – NOVEMBER 2019
ANALYTICAL REPORT: by Oleg Ustenko, Julia 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., Tue, Nov 19, 2019
WASHINGTON, D.C. - The "Ukraine Macroeconomic Situation – November 2019" analytical report with several charts and graphs IS ATTACHED to this communication and can be found at the link below. The monthly Macroeconomic Situation report is prepared by SigmaBleyzer, 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: (the entire November 2019 Macroeconomic Report Situation found in the PDF document: SB_Ukr-Monthly_Ec_Report_November_2019.pdf
- During the past month, the Parliament introduced legislation to intensify the fight against corruption. It included increasing the role of the High Anticorruption Court (HAC) and developing the capacity of the State Investigation Bureau (SIB). The SIB has already initiated several criminal investigations against high-level government officials. The Parliament also passed in its first reading a bill "On Farmland Turnover" that foresees the lifting of the moratorium on farmland sales from October 1, 2020.
- President Zelenskyy’s office announced that the leaders of France, Germany, Russia and Ukraine would meet in Paris on December 9 to intensify the efforts to search for a peaceful settlement of the Donbas Conflict.
- In the third quarter of 2019, the Ukrainian economy continued to expand, with a GDP growth rate of 4.2% yoy. GDP growth was supported by high growth in construction and retail trade. More frequent monthly output data show that economy recovery is still ongoing. For the year as a whole, GDP is expected to grow at 3.5%.
- Despite a fiscal budget deficit in September, the cumulative consolidated budget balance from the beginning of the year remained positive at UAH 8.7 billion over first nine months of the year.
- Consumer inflation continued to decelerate in September, with the overall inflation index dropping 1.3 percentage points to 7.5% yoy. The deceleration in price growth was the result of tight monetary policy and increased supply of foodstuffs thanks to a large new harvest.
- In the banking sector, Hryvnia deposits grew at a rate of 12.2% yoy, while growth of foreign currency deposits denominated in USD remained almost unchanged at 10.4% yoy. However, bank lending activities was sluggish in September, with Hryvnia loans increasing only by 0.3% yoy and foreign currency loans declining.
- In October, the UAH/USD exchange rate depreciated by 0.8% mom, fueled by reduced supplies of dollars caused by the provision of several tranches of VAT reimbursements to exporters.
- In September 2019, the deficit of Ukraine’s current account of the balance of payments declined by 20.5% yoy to USD 1,111 million (compared to a deficit of USD 1,397 million in September 2018). The deficit was fully covered by USD 1,172 million of financial inflows (principally from trade credits). The overall balance of payments had a surplus of USD 60 million, increasing international reserves to USD 21.4 billion at the end of September 2019.
The entire November 2019 Macroeconomic Report Situation found in the PDF document: SB_Ukr-Monthly_Ec_Report_November_2019.pdf