Ukraine Economy: IMF-Ukraine saga on pace for September conclusion. August 20, 2018

The Ukrainian economy is growing at a healthy rate, slightly ahead of our expected pace, which leads us to upgrade our full-year growth outlook. However, GDP growth will slow in 2019 as political uncertainty takes hold ahead of presidential and parliamentary elections. Inflation has slowed on the back of a bumper harvest, but fundamental downside pressures are persisting, prompting the NBU to keep its monetary policy tight. The FX market has been turbulent in recent weeks and the hryvnia has dipped. The absence of official external funding is a notable risk that could aggravate the situation rapidly in the coming months. The return of the IMF and disbursement of a new loan tranche is a critical requirement for the economy to function smoothly through the end of 2019. The IMF mission will visit Ukraine in September and it's hard to overestimate the importance of that visit.


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