Ukraine is likely to see stronger economic growth and tamer inflation in 2010 than analysts had previously expected, a Reuters survey showed on Monday, as the ex-Soviet republic looked set to win new support from the IMF.
Ukrainian gross domestic product is likely to grow 4.2 percent in 2010, analysts said, raising their view from 3.9 percent a month earlier. They now see Q2 GDP growing 5.2 percent, up from 4.2 percent in a previous poll.
Analysts also cut their average forecast for 2010 inflation in Ukraine to 11 percent from 12.2 percent a month ago, and they expect the June consumer price index year-on-year to slow from 15 percent to 8 percent.
The more optimistic forecasts were linked with the likelihood of the Ukraine restarting a cooperation programme with the International Monetary Fund in coming weeks and receiving credit for supporting the balance of payments and financing its budget deficit.
An IMF mission said at the end of a visit to Ukraine on Saturday that it would recommend to the board of IMF directors a loan of $14.9 billion in a 2-1/2 year stand-by facility. [ID:nLDE66204F]
Analysts said the IMF support would help Ukraine borrow more cheaply on the international market from the middle of July and help bring greater stability to its financial market.
"The (IMF) programme will give an unambiguous signal for a lowering of credit risk on sovereign debt. The spreads on the eurobond market and CDS spreads will also fall," said Olexander Valchishen of Invest Capital Ukraine.
The government sees 2010 inflation at 13.1 percent, compared with 12.3 percent last year, and GDP growth at 3.7 percent, marking a rebound from a 15 percent contraction last year.
Government officials, however, repeatedly said in June that forecasts would improve in September as inflation slowed and the economic recovery picked up pace.
According to the State Statistics Committee, inflation in May this year dropped to 8.5 percent from 14.7 percent in the same month last year, while GDP growth in Q1 reached 4.9 percent compared with minus 20.2 percent in January-March last year. The Statistics Committee only publishes quarterly GDP data.
The IMF foresees Ukrainian economic growth in 2010 at 3.7 percent and inflation at around 9.2 percent.
Below are the results of the survey of analysts at Alfa Bank, Astrum Investment Management, CASE (Ukraine),Concorde Capital, Dragon Capital, Invest Capital Ukraine, the Institute for Economic Research and Political Consulting, Interbusiness Consulting, Phoenix Capital, Razumkov Centre, Sparta, Troika Dialog, UkrSibbank, Ukrsotsbank, and Erste Bank Ukraine.
median lowest highest govt fcast 2009 CPI June(m/m) +0.2 -0.6 +0.5 +0.5 +1.1 CPI June(y/y) +8.0 +7.3 +11.8 n/a +15.0 CPI ’10 +11.0 +7.6 +13.0 +13.1 +12.3 GDP Q2(y/y) +5.2 +3.3 +7.0 n/a -17.8 GDP ’10 +4.2 +3.0 +6.0 +3.7 -15.1 Output June(y/y) +9.6 +6.0 +13.9 n/a -27.5 Jan-June(y/y) +11.4 +8.9 +13.2 n/a -31.0 Output ’10 +8.4 +5.0 +12.0 +5.3 -21.9 Hryvnia/$ end-July
7.90 7.85 7.95 n/a 7.85 Hryvnia/$ end-Dec ’10
8.02 7.50 8.50 n/a 8.00 Trade balance ’10 ($bln)
-0.26 -2.80 +1.60 -1.90 -2.0 C/A balance ’10 ($bln)
+0.62 -1.40 +2.50 -1.0-0.0 -1.9 Capital account ’10 ($bln) +1.40 -1.50 +4.50 -4.0-3.0 -11.8
