Economy and politics

Ukraine’s total governmental debt (direct) and guaranteed debt increased by 5.4%, to USD 48.3 bln, during August 2010, posting 21.3% YTD growth.

In 1H10, the gross foreign debt of Ukraine increased by 1.2% to USD 104.5 bn. Government sector debt added 8.7%, the banking sector lost 8.3% and foreign debt of corporations increased by 5.8%.

The Ministry of Economics of Ukraine expects an acceleration of inflation (CPI) higher than 1.2% in September and 12% in 2010. The main reasons are food price risks and utilities tariff risks.

Growth of the industrial output of Ukraine in August 2010 accelerated to 9.2% yoy to reach 10.9% in 8M10.

From January through August Ukraine’s electricity exports grew by 15.3%, to 2.5 bln kWh. This is quite a small figure given 56% YoY growth in 5M2010, and even 43% during 1H2010.

International rating agency Fitch confirmed its long-term rating of Ukraine at the “B” level with a forecast of “stable.”

The consumer price index (CPI) increased in August by 1.2% m/m, bringing the 8M10 yoy level to 8.3%. The producer price index (PPI) added 0.9% m/m, thus slowing down in 8M10 to 23.3%.

Total governmental debt increased by 6.3% m/m, to USD 45.9 bln, in July 2010. Direct governmental debt increased by 5% m/m, to USD 34.9 bln, and government-guaranteed debt grew by 10% m/m to reach USD 12 bln.

The government debt of Ukraine in July 2010 increased by 6.5% to USD 45.9 bln total (15.2% YoY).

The current account deficit in July is USD 255 mln and the financial account surplus is USD 1 bln. A 7М10 surplus of current account is USD 24 mln, and the financial account surplus is USD 5.15 bln.