As Ukraine enters the 2019 election cycle with no clear outcome, businesses and foreign investors are adopting a wait-and-see approach. GDP growth is slowing due to weakening demand and tight monetary and fiscal policies, but broad macroeconomic and financial stability remain and we see no material risks to that base case. Inflation is sure to slow further in 2019 and the NBU is almost certain to start easing monetary policy in the coming months. Risks related to the external sector are also manageable – the C/A widened in 2018 but is unlikely to widen further in 2019. Debt will be available for both the private and public sectors, as long as the IMF program continues as planned.

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