ANALYTICAL REPORT: by Oleg Ustenko, Julia Segura, Valentyn Povroznyuk, Edilberto L. Segura SigmaBleyzer multinational private equity firm & The Bleyzer Foundation (TBF), Kyiv, Ukraine Published by the U.S.-Ukraine Business Council (USUBC), Wash, D.C., Sun, April  14, 2019 

WASHINGTON, D.C. - The "Ukraine Macroeconomic Situation – April 2019" analytical report with several charts and graphs IS ATTACHED to this communication and can be found at the link below.  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:  (entire April 2019 Macroeconomic Report Situation found in the PDF document SB_Ukr-Monthly_Ec_Report_April_2019-Final.pdf)

Executive Summary

1) Ukraine successfully completed the first round of the presidential elections on March 31. The rate of participation in the first round was high and reached 63%. The elections were regarded by international observers as fair and transparent.  As was expected, comedian and actor Volodymyr Zelenskiy received the highest number of votes (about 30%) while current President Poroshenko was second with about 16% of the votes.  The second round of the elections between these two presidential candidates will take place on April 21st.   The current polls give Zelenskiy a 2:1 advantage.

2) Despite election uncertainties, in February 2019 the Ukrainian economy continued to perform well supported by strong domestic demand. In fact, high-frequency data for February show high rates of growth in construction activities (19.5% yoy), followed by retail trade turnover (6.8% yoy), and by agricultural output (3.6% yoy.)  In addition, transportation and passenger trade turnover expanded by 2.7% yoy and 3.9% yoy, respectively. At the same time, Ukrainian industrial production declined at a lower rate of -1.8% yoy in February, compared to -3.3% yoy, in January 2019. GDP is now expected to grow by 2.8% in 2019.

3) Following a fiscal deficit in January, the consolidated budget returned to surplus in February. The cumulative consolidated budget balance from the beginning of the year amounted to at UAH 4.7 billion in January-February.

4) In February, consumer inflation continued to decelerate. The all items index dropped 0.4 percentage points to 8.8% yoy. Inflation is expected to decline further to 8% by the end of the year. 

5) National currency bank deposits continue to improve in February. National currency deposits by the corporate and household sectors grew at rates of 10.6% yoy and 15.0% yoy, respectively.

6) The UAH/USD exchange rate appreciated at the beginning of March, then remained relatively stable, and finally depreciated slightly by the end of the month. Overall, the UAH/USD exchange rate depreciated by 1.6% in March to 27.2 UAH/USD.

7) In February 2019, the current account of the balance of payments had a deficit of USD 381 million, due to a higher growth in imports of goods (15% yoy to USD 4.6 billion), than in goods exports, which increased by 7.3% yoy (to USD 3.6 billion). This deficit was partly covered by foreign inflows of USD 130 million, principally from foreign direct investments. International reserves declined slightly to about USD 20 billion.

NOTE:  The entire Macroeconomic Situation Report for Ukraine for April 2019, with charts and graphs, can be found in the PDF document SB_Ukr-Monthly_Ec_Report_April_2019-Final.pdf