Economy and politics

Official statistics on retail trade indicate a 29.0% YoY growth in the sector’s turnover in 4M08. The growth in retail trade turnover accelerated from +27.2% YoY in 3M08 and +28.8% YoY in 2007.

Official statistics indicate real GDP growth accelerated to 6.7% in April and 6.2% in 4M08 from 6.5% YoY in March and 6.0% YoY in 3M08, respectively.

FitchRatings changed its credit rating outlook on Ukraine from positive to stable and kept the country’s sovereign rating at BB-. The agency noted the threats of inflation and the widening current account deficit on the country’s macroeconomic performance as reasons for the downgrade. Fitch considers the measures adopted by the Ukrainian government in order to slowdown the price growth insufficient and named inflation as the key factor for the volatility in the Ukrainian economy in the future.

Starting July 1, the gas price for industrial enterprises in Ukraine will be raised to USD 292 per thsd cbm from the current USD 283. This is the third month in a row the government has increased the gas price for the industrials. Since Jan. 1, 2008, the price of gas will have appreciated USD 39 per thsd cbm for the enterprises.

Spurred on by food prices, inflation in Ukraine continues growing high, coming in at 3.1% MoM in April. Compared to April 2007, the CPI has risen 30.2% YoY and 13.1% since the beginning of 2008. As noted, the prices in the food sector grew 5.2%

The average official salary in Ukraine reached USD 337 (UAH 107) in March 2008, the State Statistics Committee has reported.

The Chairman of the National Bank of Ukraine said he believes in UAH appreciation while commenting on the current FX policy.

The National Bank of Ukraine has decided to increase its base rate to 12%, effective April 30.