UKRAINE - MACROECONOMIC SITUATION REPORT –
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., Wed, September 11, 2019
WASHINGTON, D.C. - The "Ukraine Macroeconomic Situation – September 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: (entire September 2019 Macroeconomic Report Situation found in the PDF document: SB_Ukr_Monthly_Ec_Report_September_2019.pdf)
1) The first session of Ukraine’s new Parliament (Verkhovna Rada) took place on August 29. It appointed Dmytro Razumkov (number one in the list of MPs from Servant of the People Party) as Speaker of the Parliament. The Verkhovna Rada also appointed Oleksiy Honcharuk as Prime Minister, followed by the appointment of the members of the Cabinet of Ministers. The President submitted to Rada a number of anticorruption draft laws. The Rada also limited the deputies’ immunity to legal action against the results of their voting and political statements.
2) A swap of 35-for-35 prisoners between Russia and Ukraine was completed on September 7th, which has risen expectations that further peace progress may be possible.
3) In the second quarter of 2019, Ukraine’s GDP grew by 4.6% yoy, compared to 2.5% yoy in the first quarter of the year. On a quarter-over-quarter basis, the seasonally adjusted rate of real GDP growth was 1.6% qoq. These are some of the highest rates of GDP growth since 2011. More frequent monthly output data show that the economy recovery is still ongoing. The principal driver of economic growth is domestic consumption, supported by higher wages and foreign remittances.
4) The overall fiscal budget situation continues to be satisfactory, with a consolidated surplus UAH 22.7 billion in January-July (0.9% of period GDP).
5) Consumer inflation remained almost unchanged in July, with an all items index of 9.1% yoy. Core inflation also remained unchanged at 7.4% yoy for the third month in a row.
6) In the banking sector, in July Hryvnia deposits grew at a rate of 7.0% yoy, while foreign currency deposits saw their growth accelerating almost six times to 13.6% yoy. Bank lending posted sluggish performance in July, with Hryvnia loans growing by 3.2% yoy while foreign exchange loans declined at a rate of 6.1% yoy.
7) The UAH/USD exchange rate remained stable during August, finishing the month at around 25.2 UAH/USD.
8) In July 2019, the deficit in the current account of the balance of payments declined by 38.5% yoy to USD 609 million, compared to the deficit of USD 990 million in July 2018. The deficit was fully covered by financial inflows which reached USD 1,852 million in July 2019, an increase of 134% yoy. These inflows led to an increase in international reserves, which reached USD 22.0 billion (about 3.5 months of imports).
NOTE: The entire Macroeconomic Situation Report for Ukraine for September 2019, with charts and graphs, can be found in the PDF Document: SB_Ukr_Monthly_Ec_Report_September_2019.pdf