WASHINGTON, D.C. - The "Ukraine Macroeconomic Situation – August 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. On September 6th, an IMF mission started its work in Kyiv to assess the current status of the program. It is expected that the main actions that Ukraine will need to implement in order to unblock cooperation with the Fund are increases in gas tariffs for households to international parity level, acceleration of the privatization program, and agreement on a sustainable fiscal budget, including pension reform.
2. In the second quarter of 2018, GDP expanded by 3.6% yoy, compared to 3.1% yoy in the first quarter of the year.  This growth rate was the highest rate achieved since 2016. Monthly data for July  indicate that the Ukrainian economy has continued to growth at a solid pace. The industrial sector grew at a rate of 2.9% yoy in July, compared to 2.2% yoy in June. Retail trade turnover accelerated to 6.6% yoy and the construction sector expanded by 10.6% yoy. But agricultural output declined by 11.2% yoy in July, due principally to bad weather with high temperatures.
3. In July 2018, the state budget had a deficit of UAH 3.6 billion. This deficit was partially offset by a surplus in local budgets of UAH 0.7 billion. Thus, the consolidated budget had a smaller deficit of UAH 2.9 billion.
4. Consumer inflation posted a significant deceleration for the third consecutive month in July. The all items index dropped 1.0 percentage points to 8.9% yoy.
5. In the banking sector, both deposits and lending showed positive developments in July. Household Hryvnia deposits grew by about 20% yoy while corporate Hryvnia deposits increased by 9.7% yoy.  Total Hryvnia loans grew by 12.8% yoy and foreign currency loans denominated in USD posted the first increase in five years at 1.9% yoy.
6. The UAH/USD exchange rate started a depreciatory trend in the second week of August. The major reasons for depreciation were increased demand for dollar from agricultural producers, from non-residents banks for dividends repatriation purposes, and from importers for contract closing purposes. There were also enhanced Hryvnia resources in the Forex market due to repayment of sovereign bonds denominated in Hryvnias.
7. In July 2018, the deficit of the current account of the balance-of-payment of Ukraine increased to USD 1.1 billion (compared to a deficit of USD 401 million in July 2017). This deficit was due to faster imports growth in July (24.9% yoy) than exports (12.6% yoy).  Merchandise exports were affected by obstacles imposed by Russia on cargo shipments in the Azov Sea, which resulted in a large fall in the pace of export growth in July. International reserves declined slightly to USD 17.7 billion at the end of July.

NOTE: The entire Macroeconomic Situation Report for August 2018 can be found at the link below: Ukr_Monthly_Ec_Report_August_2018.pdf