With Bloomberg news reporting that Ukraine’s government sees no reason to increase utility tariffs for households this heating season (mid-October to April), it is hard to see the International Monetary Fund now being able to agree to the sign on the fourth review anytime soon.

This is a clear example of backtracking, since the government agreed in the third review under the IMF program to announce utility price hikes from July 1. This seems to be a very political move by Prime Minister Volodymyr Groysman and President Petro Poroshenko.

I guess few people expected the fourth review to be signed off any time soon anyway – given the Ukrainian side are relatively flush with cash at the moment, and likely could access markets cheaply.

So maybe this does not change much in the short term – but it is bad for the longer term structural reform agenda. Guess also there are still a lot of difficult structural aspects of the IMF program on which the government is foot dragging – particularly the anti-corruption agenda (there seems to be more effort by the Poroshenko regime to put pressure on anti-corruption fighters than the main culprits in terms of corruption).

Lots of focus this week on the 2.4 percent real gross domestic product growth print, and how good/bad that was. I guess the positive that Ukraine is growing, still after major headwinds, but from low base, arguably growth should be much higher/stronger. Why isn’t it? Well the business environment is still poor, and this is detracting from foreign and domestic investment.

Interesting to look back at some post-conflict economies – in emerging Europe, and see that the likes of Serbia, Croatia and Macedonia all grew 5-6 percent annually in the 4-5 years after war/conflict, from a low base. So likely Ukraine should be doing better, from such a low base – remember it lost 20 percent of GDP, and half of USD nominal GDP at exchange rate from 2013-2015. One might have expected a stronger bounce. I guess reasons are – weak domestic political mix still, slow progress in improving business environment, and still conflict in the east, with pressures still from Russia arguably only partially compensated by support from the West.