Economic agendas from Presidential campaign 2010

Ukrainian Center for Independent Political Research publishes a 16-page research into the economic programs of the presidential candidates in the election-2010. The main three conclusions of the research are: 1) There is no correlation between actions of the candidates and their programs; 2) Candidates are addressing voters with the same promises as they did before without risking losing them; 3) Programs can contain ideologically contradictory messages, which shows willingness of the candidates to increase their electoral support.

In a nutshel, political programs during elections in Ukraine remain a formality.

For those interested in a full research, here is the link to a pdf documen in Ukrainian language.

Gas price formula may be changed

Dubina, Head of Naftogaz, noticed that the formula used to set the price of gas for Ukraine is up to negotiation. There was no reaction from Gazprom, however, Dubina thinks that his questioning of the forumla will not lead to the gas war with Russia this year.

EU to give €70 million for energy efficiency in Ukraine

The Eastern Europe Energy Efficiency and Environment Partnership will be launched during a donor conference, jointly organised by the European Commission and the Swedish Presidency of the EU, on 26 November in Stockholm.

The European Commission is already supporting efforts to improve Energy Efficiency in Ukraine, and will begin disbursing €70 million in related sectoral budget support early next year.

National Bank's independence criticised by Minister of Economy

Danylyshyn, Minister of Economy, criticized independence of National Bank of Ukraine (NBU) in his address "Government and National Bank: searching for common strategy". He noticed that the NBU should become closer to executive branch instead of undermining its economic policy. He said that government runs a budget deficit and instead of helping the gov't NBU undermines its policy by treating the deficit and the main inflationary cause...NBU's top management got criticized for shady distribution of refinancing funds, selling currency to selected buyers at lower rates, rumored participation in currency exchange speculations.

Among other things Minister suggested that the Head of NBU is nominated by the government. Current Head of the NBU Stelmakh retires on December 15, 2009. In case Yuliya Tymoshenko wins the presidency she will propose her own nominee to occupy this post.

World Bank improves outlook for 2010 Ukraine’s GDP growth

World Bank experts think 15 percent GDP contraction in 2009 to be a realistic estimate. For 2010 GDP growth of 2.5% is expected mainly due to improved export demand. Stress in the global financial conditions is expected to slow down the pace of recovery. Strained private sector finances will constrain investment, while continued labor market adjustment and cost cutting strategies in the corporate sector will weigh down on consumption demand. WB expects inflation to fall to below 14% by end-2009 and to below 11% by end-2010. Source.

IMF halts financing Ukraine till the end of presidential race

IMF Chief Dominique Strauss-Kahn said to Reuters that the fund was unlikely to continue cooperation with Ukraine until after the Jan. 17 election for president. Ministry of Finance of Ukraine supposedly plans to sell SDR 800 mln out of SDR 1,309 bn that it has already received from the fund in order to finance the budget deficit. NBU representatives assure that the currency exchange rate of Hryvnia will be stable at least by the end of the year.

EBRD: Ukriane is a leader in economic downfall

Annual EBRD Report says that Ukraine has suffered economically more than any other country of Eastern Europe and Central Asia. Ukraine heads the list of 29 countries and is in the top 5 with double digit GDP downfall. As 2009 ends the downfall is predicted to be around 14-15%. For comparison, GDP of other coutries in Eastern Europe will contract in 2009 for about 6.3%.

Several factors are responsible for such a downfall in Ukraine:

• Decrease in demand for Ukrainian exports abroad
  
• Price decrease for steel and chemichals
• Imported gas price rise
• Contraction of FDI for the first time in 10 years.

Source