WASHINGTON, D.C. - The "Ukraine Macroeconomic Situation – June 2019" analytical report with several charts and graphs IS ATTACHED to this communication and can be found in the PDF file  SB_Ukr-Monthly_Ec_Report_June_2019.pdf. 

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

  1. On May 20, Volodymyr Zelenskyy was inaugurated as the sixth President of Ukraine. In his inaugural speech the President reconfirmed his commitment to build a better Ukraine for all, to stop corruption and deliver all necessary reforms. At the end of his address to the Parliament, the President dissolved the Verkhovna Rada of the eighth convocation. Parliamentary elections are expected to take place on July 21.
  2. Despite political uncertainties related to the elections and weak external demand, the latest monthly data from the State Statistics Service show that the economy continues to recover at a reasonable rate.  In particular, industrial production grew by 5.2% yoy in April, the highest growth rate since the end of 2016.  This expansion was led by manufacturing, which increased by 7.4% yoy. Other economic sectors that performed well in April 2019 included construction activities, which enjoyed a growth rate of 30.2% yoy.  It was followed by retail trade with a growth rate of 9.1% yoy, and passenger transportation, with a growth rate of 6.3% yoy.
  3. The consolidated budget balance was positive in April thanks to sharp acceleration in growth of state revenues. Cumulative consolidated budget balance totaled UAH 17.6 billion in January-April (1.4% of period GDP).
  4. Consumer inflation increased by 0.2 percentage points in April reaching 8.8% yoy. Core inflation continued to decelerate dropping another 0.2 percentage points to 7.4% yoy due to the tight monetary policy of the NBU.
  5. The situation with banking deposits further deteriorated in April. Growth of total national currency deposits decelerated to 7.4% yoy as both corporate and household deposits reported slower growth (3.1% yoy and 13.7% yoy respectively). On the lending side, bank loans sustained mixed developments in April, with Hryvnia loans increasing by 4.6% yoy while US denominated loans declining by 4.2% yoy in the reporting month.
  6. The UAH/USD exchange rate was relatively stable during the month of May, except for the last three days of the month, when it depreciated by 1.9% to 26.6 UAH/USD. This depreciation was caused by increases in Hryvnia supply to exporters associated with large VAT reimbursements, which led to large dollar purchases.
  7. In April 2019, the current account of the balance of payments was almost in balance, with a small deficit of USD 8 million, compared to a deficit of USD 171 million in April 2018. The lower current account deficit was due principally to an improvement in the primary income account, which grew by 101% yoy and had a surplus of USD 471 million in April. International reserves remained at about USD 20.5 billion at the end of the month.​​

    USUBC NOTE:  (entire June 2019 Macroeconomic Report Situation found in the PDF document  SB_Ukr-Monthly_Ec_Report_June_2019.pdf)