17.04.2015. Monthly Economic Monitor Ukraine, IER

In the latest issue of the Institute for Economic Research and Policy Consulting (IER):

Politics: On March 11, the Executive Board of the IMF approved a four-year extended arrangement under the Extended Fund Facility for Ukraine.

Real Sector: Real GDP in 2014 declined by 6.8% due to drop in domestic demand.

Energy sector:The Naftogaz of Ukraine and Russian Gasprom negotiated price for gas at USD 247.18 per thousand cubic meters for the second quarter of 2015.

Agriculture: Between January and February Gross agricultural production decreased by 3.6% yoy.

External sector: Current account deficit in February was USD 0.4 bn, which is close to the deficit in February 2014.

Fiscal policy: Between January and February tax revenues due to general fund of central fiscal were by 7.9% higher than the target primarily due to higher than expected hryvnia depreciation and larger resulting inflation.

Social policy: The Government revised the procedures and eligibility criteria for the housing and utility subsidies, which would result in higher coverage of Ukrainian population by this program.

Labour market: Unemployment rate in the last quarter of 2014 exceeded 10% for the first time since the first quarter of 2002.

Monetary policy: In March, consumer prices exceeded 10% mom for the first time since 1995.

Exchange rate: In March, the NBU de facto introduced the exchange rate band at UAH 21.5-23.5 per USD.

State debt: The Ministry of Finance initiated consultations with Eurobonds holders on restructuring.