1. The Ukrainian Economy: Overview

2. Current Situation Poor political environment Outset of a severe economic downturn High Inflation Sharply falling incomes Currency losing value Rising unemployment

3. The Economy at a Glimpse…

4. Before the Crisis Began… 20032004200520062007 GDP (US$ bn) 50.164.986.1106.5139.7 Real GDP growth (%) 9.512.13.07.46.8 Consumer price inflation (av; %) 5.29.013.59.111.3 Populatio n (m) 47.447.146.746.546.2 Exports of goods (US$ m) 23,73933,43235,02438,94946,680 Imports of goods (US$ m) -23,221-29,691-36,159-44,143-54,300 Current- account balance (US$ m) 2,8916,9092,531-1,617-3,890

5. Importance of FDI

6. The Role of FDI in Ukraine Drives Economic Growth; 2006: $5 billions; 2007: $10.7 billions; 2008: $6.9 billions; EU – the source of the greatest amount; Major affected sectors: banking and financial services, insurance, consumer goods, telecoms

7. When the Economic Crisis Began… Higher rates for the Ukrainian dollar debt; $105 billion total external borrowing; Rising doubts for default; Lower prices of the country’s top exports – steel and chemicals; Overall contraction in world trade;

8. Monetary and Fiscal Policy Central Bank of Ukraine: responsible for monetary policy; No Currency Board; M2 grew 50% YoY basis by December 2008; Central Bank raised interest rates in an attempt to curb inflation; Fiscal Tightening through reining in social expenditures;

9. Troubles on the way… Key indicat ors 200820092010201120122013 Real GDP growth (%) 2.1-6.02.03.85.04.8 Consum er price inflatio n (%) 25.216.312.210.08.87.3 Consoli dated budget balance (% of G DP) -1.2-0.7-0.9 Current - account balance (% of GDP) -6.2-3.8-3.0-1.9-2.8-3.9 Comme rcial banks' prime rate (av; %) 17.020.017.514.012.011.0 6% Forecast Contraction in Growth; A Deep Recession in 2009; Weaker Currency:  Slump in Steel Prices and Restricted External Financing; Higher Gas Prices; Reduced Inflows of FDI; Gradual recovery expected in the future…

10. Sources:  http://www.bank.gov.ua/ENGL/default.htm  http://www.dallasfed.org/research/eclett/2007/el0701.html  www.rgemonitor.com  http://www.delukr.ec.europa.eu/page32099.html  http://www.economist.com/COUNTRIES/Ukraine/profile.cfm?folder=Profile-Economic Data  http://www.alacrastore.com/country-snapshot/Ukraine  http://globaleconomydoesmatter.blogspot.com/2008/10/ukraine-wobbles-as-financial-ground.html