Ukraine Economy: Baby steps in the right direction. May 2016

The Ukrainian economy continues to tread firmly along the recovery path, even though 1Q16 GDP growth underwhelmed expectations. We see the 2H being substantially more positive, on the back of stronger domestic and external demand. Inflation slowed drastically to single digits in April, a great achievement amid continued regulated utility tariff hikes. The FX market has remained stable now for 2.5 months – the longest panic-free period in over two years. On top of this, the IMF mission in mid-March had productive consultations, according to Ukrainian officials, and the 3rd tranche of the EFF looks certain now after nearly a year's delay.

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