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Economic developments in Ukraine in 2006 D. Shemetilo, West LB.

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Presentation on theme: "Economic developments in Ukraine in 2006 D. Shemetilo, West LB."— Presentation transcript:

1 Economic developments in Ukraine in 2006 D. Shemetilo, West LB

2 Major risks for economy Political Legislative Demographic Economic

3 PR-OU coalition (50% prob) Building a state not a nation Targeting EU Consolidation of country by resolving the problem of Russian language and NATO Normalisation of relations with Russia Fiscal discipline Recovery of growth (5-6%) and lower inflation (7-8%)

4 “ORANGE” coalition (20% prob) Building a nation not a state Targeting NATO Growing tension in society Deterioration of relations with Russia Compensation of slow economic growth through social benefits High low growth (1-2%) and high inflation (12-13%)

5 Legal environment Development and harmonisation of the legislation using the EU as a nominal anchor Corporate legislation Legal enforcement Corruption

6 Economic Outlook Growth in services and domestic consumption Lower export growth Increase in FDI Three years for structural reforms

7 Economic Outlook 2006 GDP growth 2-3% 2006 CPI 10% Average UAH/USD5.05-5.09 2006 FDIUSD4-5bn

8 Impact of the gas agreement Positive for Ukraine Long term positive for industries Ukraine receives gas at USD95/thm3 Russia gains control over Ukrainian gas re-export and domestic gas distribution

9 Structure of Ukraine’s Industry Source: Ukraine’s MoE 2004

10 Ukraine’s gas balance Source: WestLB


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