Ukraine’s economy begins to stabilize
August 5, 2009
A change in the forecast credit rating for Ukraine by Standard&Poors, a ratings agency, to “positive” reflects the progress seen as the country’s economy gradually overcomes the negative impact of the world financial crisis.
Indicators for H1’09 show that Ukraine’s economic situation has stabilized and that the first signs of its gradual recovery from internal shocks have appeared. At this time, there are signs of a gradual revival of industrial activity after bottoming out and that output is slowly beginning to rise again. Thus, in June, industrial output for grew 3.1% from May levels, compared to an average of only 1.4% growth over 2000–2008.
In addition, the volume of agricultural output has been growing since the beginning of the year at a rate of 2.6%. Public confidence in the banking system is gradually reviving and there has been positive growth in personal deposits since April: 0.6% in April, 0.7% in May, and 2.7% in June. This has spurred an increase of 1.4% in lending volumes in the real sector.
It is worth noting that in H1’09, prices on the consumer market grew barely half as fast (8.6%) as they did in the same period of 2008 (15.5%). Moreover, the pace of growth of prices for foodstuffs is nearly three times lower. The main factors having a positive impact on inflationary pressures are anti-inflationary measures by the Government and the National Bank of Ukraine (NBU) and receding negative expectations among consumers.
Tags: economy
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Ukraine
