Members of the regular public consensus forecast improved forecast of economic growth in Ukraine in 2010 from 3,5% to 4%. However, the average expected fiscal deficit worsened immediately by 30 billion hryvnia - up to 85 billion hryvnia (7.4% of GDP). According to the median forecast of participants, in 2010 nominal GDP will exceed a trillion hryvnia.
The consensus forecast of economic growth was improved due to accelerating consumption (+0.4 percentage points compared with the forecast of December 2009) and investment (+0,6 percentage points). Among the sectors, the best expected dynamics is for the the industry (6.8%) and transport (6%). The most dynamic industries in 2010 promise to be mechanical engineering (11.3%) and steel (+10%).
The participants of the forecast improved their outlook for employment. Expected unemployment rate fell by 0.5 percentage points to 8,5% among people 15-70 years old (the methodology of the ILO). At the same time, the expected growth of real incomes of the population remains at that level of 2% (while some have predicted the fall of this index).
Analysts and research institutions, banks and other financial institutions have kept the average forecast exchange rate at 8.20 UAH / USD. (range of forecasts narrowed to 7,80-8,80).
Forecasts of inflation are sharply volatile. Average growth of CPI (December to December) was 13,3%, despite the fact that the maximum projection of one of the participants reached 20%. Prices of industrial producers will grow faster than the consumer, that is clearly associated with an acceleration in the industry.
Forecasting budgetary performance remains a matter of great difficulty for the participants because of lack of information about the actual state of the treasury. The outlook on the state of public finances has provided only half of participants.
In 2010, the deficit of public finances ranges from 4,4% to 9,8% of GDP. The main source of deficit is external borrowing. Participants of the consensus forecast also believe that the capitalization of banks may require from 10 to 25 billion hryvnia public funds this year.
The data for the current wave of the consensus forecast was provided by Astrum Investment Management, Concorde Capital, Dragon Capital, Erste Bank, FOREX Club, Gainsfort Research, OTP Bank, BTA Bank, Institute for Economic Research and Policy Consulting, International Bleyzer Fund, Ukrainian business magazine "Expert", investment group "Socrat", International Center for Policy Studies.
The results of the consensus forecast (average, minimum and maximum difference between the minimum and maximum values, the number of forecasts for each parameter), as well as assumptions that guided the participants in forecasting, attached to this release. Information about prognosis in the context of each participant is closed, since 6 out of 13 participants were asked not to disclose details of their forecasts.
Consensus forecast project is conducted by Expert business magazine.
If you want some additional info regarding macroeconomic or sectoral forecasts for Ukraine in 2010 please contact Igor Lutsenko (ilutsenko at gmail.com).
Showing posts with label outlook 2010. Show all posts
Showing posts with label outlook 2010. Show all posts
Monday, March 1, 2010
Thursday, February 11, 2010
Ukrainian banks to recover soon?
Oxford Business Group undertook a study of a Ukrainian banking sector. Here are the conclusions:
Officials are hoping that banks will start opening the taps soon, and are planning to take some steps to encourage them to do so. On January 19, Valeriy Lytvytsky, the head of the group of advisors to the governor of the NBU, said it would be appropriate for the reserve to accelerate the adoption of a resolution intended to boost the credit activity of commercial banks.
Though details of how the NBU is to prompt banks to return to the loan market are lacking, predictions that the economy should move out of recession in the coming months and post modest growth by the end of 2010 may spark some interest amongst Ukraine’s banks to resume lending.
.............
While it will take time for Ukraine’s banks to regain the confidence to re-enter the loan market, the worst appears to be over for the sector, with some underperformers winnowed out and the remaining players potentially made stronger by the experience.
Officials are hoping that banks will start opening the taps soon, and are planning to take some steps to encourage them to do so. On January 19, Valeriy Lytvytsky, the head of the group of advisors to the governor of the NBU, said it would be appropriate for the reserve to accelerate the adoption of a resolution intended to boost the credit activity of commercial banks.
Though details of how the NBU is to prompt banks to return to the loan market are lacking, predictions that the economy should move out of recession in the coming months and post modest growth by the end of 2010 may spark some interest amongst Ukraine’s banks to resume lending.
.............
While it will take time for Ukraine’s banks to regain the confidence to re-enter the loan market, the worst appears to be over for the sector, with some underperformers winnowed out and the remaining players potentially made stronger by the experience.
Thursday, February 4, 2010
Ukraine's 2010 policies: do you guesswork carefully
Ukraine's elections bring a need for those interested in things Ukrainian to find out "Who is Mr. Yanukovich?" as he is the likely winner of the presidential campaign. Provided Ukrainian parties are build around personalities rather than around policies and ideologies it is very hard to understand as of now what specific stance will be taken by the new president on this or that issue. We are going to devote more attention to specific aspect of future economic, foreign and domestic policies to be expected in 2010. As of now - a a factbox from Reuters on what to expect from Ukraine's election front-runners. Read on under the cut.
Tuesday, January 19, 2010
Steelmakers keep losses low
Ukrainian steelmakers' 2009 preliminary net loss reached UAH 5bln (USD 600mln), down from the 2008 net income of UAH 17bln (approx. USD 3bln), according to Vasiliy Kharahulah, CEO of the Metallurgprom Association. We consider this a comparatively good result, taking to account the fact that 2009 sales dramaticall dropped (almost by 37%).
According to opinion of Astrum investment company, the drop of rolled steel output by 16% and rolled steel prices by 24% (in hryvnia terms) will result in a 36% drop of Ukrainian steelmakers’ net sales in 2009. Expert expect Azovstal, ArcelorMittal Kryvyi Rih and Mariupol Illich will be the only profitable steelmakers in 2009 in terms of net income.
In 2010, growth is predicted: net sales should grow by 39%, driven by output growth by 11% and prices growth of 25%. The 2010 net income margin should be 4%-6% on average.
We would like to outline that it is sharp devaluation of grivna gave a nice chance to steelmakers to increase their profitability and keep the losses low. Ukrainian currency lost almost 40% of its value since the beginning of financial crisis, softening the effect global downturn on local exporters.
Steelmakers are number one Ukraine’s exporting sector, traditionally accounting for about 40% export sales. This is compatible to share of oil in Russia’s exports.
According to opinion of Astrum investment company, the drop of rolled steel output by 16% and rolled steel prices by 24% (in hryvnia terms) will result in a 36% drop of Ukrainian steelmakers’ net sales in 2009. Expert expect Azovstal, ArcelorMittal Kryvyi Rih and Mariupol Illich will be the only profitable steelmakers in 2009 in terms of net income.
In 2010, growth is predicted: net sales should grow by 39%, driven by output growth by 11% and prices growth of 25%. The 2010 net income margin should be 4%-6% on average.
We would like to outline that it is sharp devaluation of grivna gave a nice chance to steelmakers to increase their profitability and keep the losses low. Ukrainian currency lost almost 40% of its value since the beginning of financial crisis, softening the effect global downturn on local exporters.
Steelmakers are number one Ukraine’s exporting sector, traditionally accounting for about 40% export sales. This is compatible to share of oil in Russia’s exports.
Monday, January 18, 2010
Business expectations turn to positive
Research by National bank of Ukraine indicated that expectations of top management of Ukrainian enterprises had shifted to modest positive zone in 4th quarter of 2009. In detail, 10% of business entities expect sales to rise in next 12 months, compared to 8% in 2nd and 3rd quarter of 2009. Also, the share of those who expect sales to go down narrowed to 24%.
For the year 2010, business sector expects inflation at the level of 15.1%. It is an optimistic estimate, considering rising gas prices and tariffs for heating etc. Also almost 60% expect devaluation of grivna in this year.
Experts outline that the balance of general expectations about the economic and financial state of companies in the next 12 months turned from a negative 2% in 3Q09 to positive 6.6% in 4Q09, becoming positive for the first time since the crisis entered its harsh stage in 4Q08.
The NBU has published its survey of business expectations in 4Q09. The survey is based on interviews with 1,245 companies across Ukraine, and provides a good representation of the Ukrainian business community.
For the year 2010, business sector expects inflation at the level of 15.1%. It is an optimistic estimate, considering rising gas prices and tariffs for heating etc. Also almost 60% expect devaluation of grivna in this year.
Experts outline that the balance of general expectations about the economic and financial state of companies in the next 12 months turned from a negative 2% in 3Q09 to positive 6.6% in 4Q09, becoming positive for the first time since the crisis entered its harsh stage in 4Q08.
The NBU has published its survey of business expectations in 4Q09. The survey is based on interviews with 1,245 companies across Ukraine, and provides a good representation of the Ukrainian business community.
Friday, January 15, 2010
Sell-side firm forecasts grivna exchange rate for 2010
Dragon Capital, one of the largest Ukrainian investment companies, forecasts foreign exchange rate to be 7.5 grivna for 1 USD at the end of 2010. UR sees this prediction as too optimistic, considering recent sudden and sharp fluctuation of Ukrainian currency rate after the end of New Year vacations. Since 7th of December, grivna has lost almost 2.5% of its value against dollar during 4 days, reaching its September’09 levels – 8.20. Only due to intensive market interventions by National Bank of Ukraine, hryvna/USD rate is now 8.07.
These fluctuations are the reason for doubts regarding the peaceful future of grivna in 2010. According to Dragon’s forecast, the revalutaion will be supported by inflow of capital (strange assumption, considering worsening of financial condition of Ukrainian leading corporations) and economic growth (almost eqal to zero).
What was left out in Dragon Capital's assumptions is growth of public debt, worsening of quality of credit portfolios of Ukrainian banks, and predicted defaults of construction companies. All these factors, as well as possibility of sovereign defaults of emerging countries can cause zero capital inflow in Ukraine in 2010.
Regarding IMF loans, it is possible to predict that Fund will provide limited loans sufficient only for preserving national currency from sharp devaluation. Restriction of cooperation with the IMF in 2010 will be caused by overwhelming populism of Ukrainian government with its desire to control NBU and currency reserves.
To summarize, Dragon capital’s opinion represents the desired scenario for a sell-side company. Nevertheless, it seems to us in UR that the map of risks for Ukraine is a bit different.
These fluctuations are the reason for doubts regarding the peaceful future of grivna in 2010. According to Dragon’s forecast, the revalutaion will be supported by inflow of capital (strange assumption, considering worsening of financial condition of Ukrainian leading corporations) and economic growth (almost eqal to zero).
What was left out in Dragon Capital's assumptions is growth of public debt, worsening of quality of credit portfolios of Ukrainian banks, and predicted defaults of construction companies. All these factors, as well as possibility of sovereign defaults of emerging countries can cause zero capital inflow in Ukraine in 2010.
Regarding IMF loans, it is possible to predict that Fund will provide limited loans sufficient only for preserving national currency from sharp devaluation. Restriction of cooperation with the IMF in 2010 will be caused by overwhelming populism of Ukrainian government with its desire to control NBU and currency reserves.
To summarize, Dragon capital’s opinion represents the desired scenario for a sell-side company. Nevertheless, it seems to us in UR that the map of risks for Ukraine is a bit different.
Wednesday, December 2, 2009
Ukraine's macro outlook for 2010 according to UkrSibBank
Ukrainian economy is to deliver moderate (2.7%) growth next year, bouncing
back from distressed levels. Consumption would remain broadly stable in
nominal terms providing opportunities for import substitution. Growth is to
be net-export driven.
Some adjustments take place in current account and export mix, improving
resistance to possible fluctuations on steel market. Still, vulnerability of
Ukrainian economy to movements of global steel prices remains
pronounced. Ukraine would see C/A surplus next year due to weak currency.
Ukraine will go through election cycle in early 2010, while the IMF
cooperation is likely to be frozen for some time.
Public finance will see the second consecutive year of double-digit deficits
as a percentage of GDP. The budget is likely to be redrafted with
participation of IMF technical experts over 2010.
CPI is declining due to subsiding pressures on demand side, but it would
remain high slipping in single-digit zone only in 2011.
Local currency is cheap comparing to CEE peers, but high public deficits
coupled with Ukraine’s sensitivity to global conjuncture introduce downside
risks over the course of 2010.
Banking system can cope with asset quality, albeit it might still need capital
injections and would not be able to restore growth soon. Central bank
should seek ways to inject UAH funding to the system.
Domestic interest rates are well in double digits and would remain high in
1H2010 due to crowding-out by public debt, de-leveraging of external debt
and limited inflow of deposits to domestic banking system. From 2H2010
onwards we expect domestic rates to decline.
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back from distressed levels. Consumption would remain broadly stable in
nominal terms providing opportunities for import substitution. Growth is to
be net-export driven.
Some adjustments take place in current account and export mix, improving
resistance to possible fluctuations on steel market. Still, vulnerability of
Ukrainian economy to movements of global steel prices remains
pronounced. Ukraine would see C/A surplus next year due to weak currency.
Ukraine will go through election cycle in early 2010, while the IMF
cooperation is likely to be frozen for some time.
Public finance will see the second consecutive year of double-digit deficits
as a percentage of GDP. The budget is likely to be redrafted with
participation of IMF technical experts over 2010.
CPI is declining due to subsiding pressures on demand side, but it would
remain high slipping in single-digit zone only in 2011.
Local currency is cheap comparing to CEE peers, but high public deficits
coupled with Ukraine’s sensitivity to global conjuncture introduce downside
risks over the course of 2010.
Banking system can cope with asset quality, albeit it might still need capital
injections and would not be able to restore growth soon. Central bank
should seek ways to inject UAH funding to the system.
Domestic interest rates are well in double digits and would remain high in
1H2010 due to crowding-out by public debt, de-leveraging of external debt
and limited inflow of deposits to domestic banking system. From 2H2010
onwards we expect domestic rates to decline.
Full Report
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