About Ukraine

Ukraine is to host EURO-2012 soccer championship together with Poland shortly which makes the country naturally attractive for investment. In a longer perspective, Ukraine is expected to join EU. This is just a teaser intro of course, but a businessman needs only a few signs to make a decision.

Politics
The recent positive developments in Ukraine included the ratification by Verkhovna Rada (Ukraine’s Parliament) of the complete list of laws necessary for the accession to te WTO followed by most recent assertion that the positive decision on Ukraine’s membership will be taken already in early February.

The instability of Ukraine’s politics in early 2007 was followed by the parliamentary re-election in September 2007.

The Economy
The political situation hardly played any role in Ukraine’s economic growth with GDP increasing an average 7% and industrial production expanding by a healthy 12%. The inflation rate grew as well with the political parties spending more on the re-election campaigns to almost 12% by the end of 2007 starting from a healthy 4.2% in July. This, however, was happening rather despite the rapid economic growth, which was largely supported by consumer demand. Household spending continued to get stronger with consumer credit issued in the first five months of 2007 amounting to $59 million – a 73% increase over the same period in 2006.

Investment activity both internal and external remained buoyant. The central stock exchange PFTS index more than doubled over a 6-month period. At the same time, the inflow of net foreign direct investment slightly weakened down to $847.1 million in the first quarter while gross fixed capital accumulation increasing by 32.2% (compared to 15.9% in 2006).

Forecast
Analysts assume that economic growth will continue in 2008 even though inflation rate is expected to grow again due the new Cabinet’s initiative to pay back the Soviet savings (limited however to $200 per account).

The continuing significant inflows of FDI and resulting growth in foreign exchange?  reserves will ensure the country’s external economic stability even given the current worsened global economic perspectives.