Economy and politics

The merchandise balance deficit in Ukraine for 1H08 is USD 9.8 bln; USD 1 bln higher than in January-May and 2.3 times higher than in the same period in 2007. Merchandise exports grew 40.7% in 1H08 YoY, while merchandise imports grew 60%.

The National Electricity Regulatory Commission (NERC) announced that gas prices for the general population will increase 13-14.1% starting from September 1, 2008.

The National Bank of Ukraine (NBU) announced that Ukraine’s monetary base increased in July 2008 6.1% MoM (15.3% YTD), thus reaching UAH 163.7 bln (USD 33.8 bln), while M3 grew 3.8% MoM (18% YTD) and reached UAH 467.5 bln (USD 96.4 bln).

PPI in July increased 3.6% MoM after a 4.2% MoM growth in June. Thus, PPI grew 46.3% YoY after a 43.7% YoY growth in June and 34% YTD in July compared to 29.4% in June.

The State Statistics Committee of Ukraine has announced CPI figures for July 2008. CPI fell 0.5% MoM, thus indicating monthly deflation for the first time since March 2006 and breaking the deflation record set six years ago.

The National Bank of Ukraine announced that its international reserves increased USD 2.58 bln (7% MoM) in June and reached USD 38 bln.

The Ministry of Finance of Ukraine announced that the consolidated debt, which includes state debt and state-guaranteed debts. increased 0.3% MoM and 0.8% YTD in June 08, reaching USD 17.78 bln.

The Ministry of Finance of Ukraine announced that the state budget in 1H08 closed with a UAH 1.88 bln (USD 388 mln) surplus, an equivalent of 0.44% GDP.

The Parliament of Ukraine met for an emergency meeting on Thursday to vote for budget amendments addressing the consequences of the natural disaster in Western Ukraine.

On Tuesday, July 29 the National Bank of Ukraine (NBU) made an Interbank intervention and bought Great Britain pounds (GBP) at the 9.4376 UAH/GBP rate, almost UAH 0.2 lower than the official NBU 9.6234 UAH/GBP rate.