17.06.2015. Monthly Economic Monitor Ukraine No.6 (176), IER

Highlight: Gas market reform

Politics: In May, Ukraine failed to get a visa-free regime for short trips of its nationals to the EU due to slow progress of Ukraine in the implementation of the EU-Ukraine Visa Liberalisation Action Plan.

Real Sector: Decline in the industrial output in April at 21.7% yoy was close to drop in March, which might signal that Ukrainian economy reached the bottom.

Energy sector: Gas prices for industrial consumers and overall gas consumption are currently on the downward trend.

Agriculture: Sown area (not including Crimea) under grain and leguminous crops decreased by 10.5% likely due to higher inputs prices and lower world prices.

Privatisation: The Government approved ambitious list of companies to be privatised in 2015.

External sector: Current account in April was positive at USD 0.2 bn as merchandise imports contracted at a faster pace than exports.

Fiscal policy: Growth of consolidated fiscal revenues in May sharply decelerated to 19.5% yoy from over 40% yoy during the previous two months.

Social policy: Number of recipients of housing and utility subsidies more than doubled and reached 7.8% of all families.

Labour market: Decline in real average wage accelerated to 29.6% yoy. The sharpest decline was in public sectors.

Monetary policy: In May, monthly core inflation slowed down below 2% for the first time since August 2014.

Exchange rate: In May, interbank exchange rate continued to fluctuate in the band set by the NBU.

State debt: During May the Government continued talks on the restructuring of external state debt with Eurobond holders. So far, agreement was not reached.