WEEKLY ECONOMIC MONITOR : TRENDS The Week of March 27-31, 2000
23 Mar 2000
WEEKLY ECONOMIC MONITOR : TRENDS
The Week of March 27-31, 2000
The positive changes in dynamics of GDP were initiated a year ago by comprehensive currency liberalization, carried out in March-April 1999.
A long-awaited (since September 1998) price liberalization was postponed due
to political reasons. It led to inevitable losses in production, first of all,
of consumers’ goods, low retail trade turnover, poor budget revenues and high inflationary expectations. This year the government finally stopped keeping prices on bread and dairy products, communal services and transportation at artificially low levels.
The new government policy is aimed at lowering budget expenditures,
refraining from purchases of T-bills on the primary market and stimulating money payments instead of the practice of mutual offsets.
The economy has also got a temporary relief from a huge external debt servicing, in the result of the expected Eurobond restructuring. Since the beginning of the year the government redeemed to creditors “just” USD 130 mln, while the National Bank repaid USD 132 mln to the IMF.
The National Bank was also active on the interbank currency market, Its purchases in January-February amounted to USD 179 mln. Last year, the NBU bought USD 732 mln on the interbank market. The international reserves of the National Bank remained practically unchanged at USD 1.04 billion.
If the trend of the fifteen previous months were to continue, then the UAH/USD official exchange rate would reach the level of 5.6 UAH/USD at the end of April, 5.80 UAH/USD at the end of May, 6.00 UAH/USD at the end of June,
6.10 UAH/USD at the end of July, 6.20 UAH/USD at the end of June, and
6.30 UAH/USD at the end of September.
Since the beginning of the year, the PFTS-index grew by 48.5 percent, while
the Russian RTS-index increased by 24.2 percent. However, even now the
PFTS-index returned to the level of early April 1998. We remind that this index started on October 1, 1997 at 100 points
In 2000 the volume of sales on the PFTS grew significantly in real terms.
According to the government, the privatization revenues in January-February 2000
totaled UAH 259 mln, which comprises one-tenth of the target for this year, or
one-third of the volume received in 1999. However, the officials are quite optimistic about the success of privatization this year, noting that sales of shares of five blue chips such as the Mykolayiv Alumina Plant, two metallurgical companies from Mariupol (Azovstal and Mariupol Metallurgy), Khartsyzk Pipeline
and the Crimean Soda plants could bring to the budget more than UAH 2.5 bln.
March 23, 2000;
The Financial Week’11
, The Ukrainian News Agency
Prepared by O.Babanin March 23, 2000.
Чешский Клуб: Высшее Образование в Чехии, Клуб Чешского Языка:
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