1. UKRAINE COUNTRY PRESENTATION 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest

2. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest

3. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest General information Area: 603,700 sq. km Population: 46.7 M (September 2006, official data), down from over 50 M in the 80s Population growth rate: - 0.6%

4. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Political situation Orange Revolution in December 2004 Constitutional reform – powers of President reduced. Parliament to name the PM March 2006 Orange Revolution parties fail to form government Anti-crisis government headed by Viktor Yanukovich appointed in August 2006 October 2006: President Yuschenko’s party „Our Ukraine” leaves government after dispute on fast-track NATO membership Politics and economy PM Yanukovich considered business-friendly Good personal relations with Russia Weaker UAH as a goal to help exporters

5. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Gas price shock

6. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Ratings Fitch BB- / outlook positive (changed in October 2006) Moody’sBa3 / stable S&PBB- / stable

7. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Ukraine: real GDP growth/1 After a drastic fall in 2005, growth resumes in 2006. In June GDP growth reaches 9.3% year-on-year. Is it sustainable?

8. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Ukraine: GDP growth/2 2006 growth mainly driven by internal consumption Real available household income increases by 20.6% in H1 2006 Registered umployment falls from 3.1% to 2.9% Capital investment growth 15.9% FDI inflow USD 2.3 bn (3.7 times increase) Gas price increase may endanger robust growth One of the highest energy/GDP unit consumption in the world

9. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Ukraine: CPI/1 Monthly CPI growth Month: 01 02 03 04 05 06 07 08 09 10 11 12

10. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Ukraine: CPI/2 Higher gas prices to lead in jump in inflation by year-end Month: 01 02 03 04 05 06 07 08 09 10 11 12

11. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Ukraine: External accounts – Trade balance (bn USD) Favourable market conditions in Ukraine’s main markets help exports, but increased energy costs and larger internal consuption drive up imports In H1 2006 C/A deficit reaches 0.9 bn USD (vs 2.2 bn surplus in H1 2005), BoP deficit 1.1 bn USD (vs. 1.98 bn surplus in H1 2005)

12. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Ukraine: External accounts – Current account (in % of GDP)

13. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Ukraine: Budgetary situation General budget balance to GDP (%) Fiscal policy remains socially oriented. Ratio of consolidated budget revenues to GDP reaches 35% in H1 2006, the highest level over last 9 years

14. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Ukraine: International reserves (M USD) Record high reserves slightly fall down in H1 2006, but quick growth after August 2006

15. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Ukraine: FDI and portfolio investments (M USD) Steady groth of portfolio investments, big jump in FDI mainly due to privatisation proceeds

16. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest (%) Growth rates of different branches of industry (2001-2005)

17. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Exports structure, January-September 2006

18. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Exchange rate movements 1996-2005 (UAH/USD)

19. 15th BACEE Country and Bank Conference 14-16 November 2006, Budapest Exchange rate movements 2004-2006 (UAH/USD) 1 USD = 5.05 UAH (official rate)