Economy and politics

The Secretariat of the President of Ukraine announced that, in 2009, the amount of funds in the State Treasury account have declined from UAH 7.7 bln. to UAH 1.1 bln. This essentially means that the State Treasury’s account balance continued to decline throughout 2009. At the moment, the publication of data on the status of the State Treasury’s account is suspended by a decree issued by Prime Minister of Ukraine Yulia Tymoshenko.

Newly released data indicates that, in 2009, Ukrainian industrial output underwent a decrease of 21.9% YoY compared to the results of 2008. The information also indicated that, in December 2009, industrial output grew by 2.6% MoM relative to November.

On December 18, the Ukrainian Government paid a JPY 563.14 mln coupon on Eurobonds that were issued in December 2006 for a total volume of JPY 35.1 bln. The maturity date of this four-year bond is December 19, 2010.

ЕБРР планирует инвестировать 1,1 млрд. евро в проекты в Украине в 2010 г., вчера отметил пресс-секретарь банка. ЕБРР уже инвестировал в Украину около 1 млрд. евро в 2009 году, и 0,8 млрд. евро в 2008 году.

According to information from the State Statistics Committee of Ukraine, consumer prices increased by 1.1% in November 2009. In January-November, the inflation rate was 11.3%. In the same period in 2008, inflation was an incredible 19.8%. Over 2008 on the whole, consumer prices rose by an astounding 22.3%. The government expects inflation to be 9.5% in 2009.

According to information from the NBU, the forecast of key macroeconomic indicators for 2010 components of GDP to 3-4%, under conditions agreed actions of the Government and the NBU expected inflation less than 10%.

Ukraine's sovereign rating received affirmation by Moody's Investors Service after Ukrzaliznytsia (UZ), the state-run rail operator in this former Soviet country, defaulted on its debt payment to Barklays. Agency kept B2 long-terms credit rating in foreign exchange with a negative outlook.

The National Bank of Ukraine (NBU) issued information that the currency inflow to Ukraine outperformed outflows in November 2009. This was stated in the NBU’s Ukrainian currency market overview. The Bank also noted that it has reduced the volume sold at FX auctions for individuals with FX-denominated borrowings by half to USD 72 mln. Since the beginning of the month, the NBU has had a minimal direct presence on the FX market. Nevertheless, the UAH exchange rate has been stable and has even seen a 0.1% appreciation.

The Fitch international rating agency has cut the ratings for a series of Ukrainian companies. The agency confirmed Stirol`s long-term rating in foreign currency at B-, while downgrading its forecast to “negative”. Fitch also confirmed Naftogaz`s long-term rating in foreign currency at CCC, while retaining its “negative” forecast.

The Fitch international rating agency has cut Ukraine’s long-term rating, in both foreign and local currencies, from “B” to “B-”. The forecast is negative. The agency also downgraded ratings of nine Ukrainian banks to “B-” (Ukrsibbank, Ukrsocbank, Forum Bank, ProCredit Bank, Praveks-Bank, VTB Bank, Oshadbank, Ukreximbank and Privatbank), as well as three Ukrainian cities (Kyiv, Odesa and Kharkiv). Previously, Standard & Poor’s also downgraded its forecast for Ukraine to stable, while confirming its “CCC” long-term sovereign rating