War Aggravates Economic Problems


Intensified fighting around Donetsk and Luhansk triggered a 12.1% y/y industrial output slump in July. The Luhansk oblast reported a 56% y/y decline in industrial production, while the Donetsk oblast’s output fell 28.5% y/y that month. In August, military forces intensified their operations, as the Ukrainian Army shut down the last supply lines from Russia […]

Default Evaded; Progress in Sight


On July 24th the Ministry of Finance paid a $120 million coupon on its Eurobond, which postponed feared default. The story is still long from over; however, the decision to pay on debts improves chances for no default scenario. Meanwhile we see a desperate fight on, between the old and new Ukraine.  Badly-needed changes reformers […]

Fragile Stability


Ukraine’s economic situation has improved significantly. GDP performance is still horrendous (at -17.2% y/y in Q1); however, the main reason for this development is the loss of the Eastern Donbas. Simultaneously, the economic position of the rest of mainland Ukraine has stabilized. The CAD narrowed to $265 million in the first four months of 2015; […]

Budget Chronicles: 1st quarter, 2015


Suddenly, Ukraine’s fiscal condition improved significantly in the first quarter of 2015. Budget revenue increased by 25.0 percent year over year, and budget surplus reached 3.9 percent of GDP. The consolidated budget’s revenue for the first quarter of 2015 totaled 140.3 billion UAH, which is 25.0 percent more than for the first quarter of 2014, […]

Your “receipt from the state”-2014


In 2014, Ukraine faced significant budgetary challenges. Revolution followed by the occupation of the part of the Ukraine’s territory, on the one hand, rose public spending due to Hryvnia depreciation and military expenditure and, on the other hand, negatively affected public revenue due to the economic crisis. As a result, the national debt reached a […]

Battle at the Precipice of Default


Debt restructuring, several scandals involving Cabinet personnel, the arrival of the IMF mission in Kyiv and the approval of several important laws were the key areas of focus over the past month.  Luckily, full-out escalation of fighting in the east did not materialize.  Skirmishes on the eastern front have intensified, and some new Russian soldiers […]

A Lull in the Barrage of Bad News


The situation on the Eastern front has eased over the past month and, surprisingly, the flow of disturbing news has also ebbed.  Instead of tanks and shelling, the headlines have focused on debt restructuring.  A kind of lull has settled over the country. At the same time economic figures keep telling a scary story. More […]

Challenging Times


“Debt operations,” an overly optimistic spending plan, tough reforms, the threat emanating from the east and intensified infighting between various Ukrainian factions are all part of Ukraine’s new reality. While these things don’t stoke optimism, there are nonetheless positive developments. There is, for example, a significant improvement in Cabinet personnel policy. We have observed dozens […]

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