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Ukraine Country Risk Report Q1 2019

Ukraine Country Risk Report Q1 2019

Following three years of severe recession from 2014-2016, Ukraine's economic recovery over the next two years will progress at a sluggish pace, as the separatist conflict and trade blockade in the Donbas, as well as lacklustre structural reform implementation, continue to weigh on the country's economic potential

Ongoing cooperation with the IMF will ensure fiscal and debt sustainability over the short term, yet over the longer term, structural reforms and a more broad-based macroeconomic recovery are needed to ensure financial stability

Monetary conditions will continue to stabilise as the Ukrainian national bank's inflation targeting credibility improves and capital controls are gradually removed

Future UAH depreciation will be a lot less severe, as previous devaluations have brought the currency closer to fair value

While political risks will remain elevated, we expect the government of President Petro Poroshenko to serve its full term until November 2019


Executive Summary
Core Views
Forecast Changes
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Prospects Of Weaker Growth In Ukraine Alleviated By New IMF Deal
GDP By Expenditure Outlook
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
TABLE: GDP GROWTH FORECASTS
Outlook On External Position
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
TABLE: TOP 5 GOODS IMPORTS IN 2017
TABLE: TOP 5 GOODS EXPORTS IN 2017
Monetary Policy
Ukrainian National Bank To Gradually Loosen Monetary Policy In 2019
Monetary Policy Framework
TABLE: MONETARY POLICY
Fiscal Policy And Public Debt Outlook
New IMF Deal Alleviating Debt Repayment Burden
Structural Fiscal Position
TABLE: FISCAL POLICY
Currency Forecast
UAH: Risk-Off Sentiment And Political Uncertainty To Weigh On Hryvnia
TABLE: FITCH SOLUTIONS CURRENCY FORECASTS
Ukraine Country Risk Q1 2019THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report are solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.Contents10-Year Forecast
The Ukrainian Economy To 2027
Structural Reform Needed To See Through The Decade
TABLE: LONG-TERM MACROECONOMIC FORECASTS
TABLE: 2018 WORLD BANK EASE OF DOING BUSINESS INDEX
Political Outlook
Domestic Politics
IMF Deal To Bolster Macrofinancial Stability During 2019 Election Season
Long-Term Political Outlook
Eastern Separatism To Persist; Reforms To Face Bumpy Path
Operational Risk
TABLE: OPERATIONAL RISK
Economic Openness
TABLE: TARIFF AND NON-TARIFF TRADE BARRIERS
TABLE: FREE TRADE AGREEMENTS
TABLE: BARRIERS TO FDI
Utilities Network
TABLE: ELECTRICITY RISKS
TABLE: FUEL RISKS
TABLE: TELECOMMUNICATIONS RISKS
TABLE: WATER RISKS
Global Macro Outlook
Continued Growth Divergence And Policy Risks Ahead
TABLE: GLOBAL ASSUMPTIONS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: UKRAINE – MACROECONOMIC DATA AND FORECASTS

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