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Committee on Balance-of-Payments Restrictions - Consultations with Ukraine - Basic document supplied by Ukraine
日期:2015/04/08
作者:Ukraine
文件編號:WT/BOP/G/21
附件下載:WTBOPG21.doc
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consultations with UKRAINE

Basic Document supplied by ukraine

OVERVIEW OF THE SITUATION AND OUTLOOK OF THE BALANCE OF PAYMENTS TAKING INTO ACCOUNT INTERNAL AND EXTERNAL FACTORS THAT AFFECT THE SITUATION

1  INTRODUCTION

1.1.  This document has been prepared pursuant to para.11 of the Understanding on the Balance‑of-Payments Provisions of the General Agreement on Tariffs and Trade 1994. It contains:

a)          review of the balance-of-payments situation and prospects, including a consideration of the internal and external factors having a bearing on the balance-of-payments situation and the domestic policy measures that are being taken in order to restore equilibrium on a sound and lasting basis;

 

b)          a full description of the restrictions applied for balance-of-payments purposes, their legal basis, and steps that are being taken to reduce the resulting effects of the policy;

 

c)          a description of conditions for the elimination or progressive relaxation of the remaining restrictions.

 

1.2.  This document was prepared using statistical data and information from the National Bank of Ukraine (NBU), the Ministry of Finance of Ukraine, the Ministry of Economic Development and Trade of Ukraine, the Ministry of Agrarian Policy and Food of Ukraine, the Ministry of Energy and Coal Industry of Ukraine, the State Fiscal Service of Ukraine, the State Statistics Service of Ukraine (SSS), and the International Monetary Fund (IMF).

2  OVERVIEW OF THE BALANCE OF PAYMENTS SITUATION AND OUTLOOK FOR UKRAINE'S ECONOMY, INCLUDING INTERNAL AND EXTERNAL FACTORS HAVING A BEARING ON THE BALANCE OF PAYMENTS SITUATION.

2.1  The Economic reasons for the introduction of measures

2.1.1  The economic situation in Ukraine

2.1.  In 2010-11 in Ukraine there was a relative recovery from the global financial crisis and its aftereffects on the real economy. This economic recovery was driven by the influence of demand from foreign markets and the increase of purchasing power domestically.

2.2.  In terms of favorable impacts from internal and external short-term events in 2011 through the first half of 2012, there was a significant increase in the volume of investment led by one-time factors such as construction and other preparations for the Euro 2012 (UEFA European Football Championship) which was held in Ukraine.

2.3.  During this period, apart from these temporary factors, the domestic market was generally characterized by low liquidity of financial sector assets, which in turn, created a lack of financial resources for lending and investment.

2.4.  Taking into account these complex factors in 2011, GDP growth in Ukraine reached 5.5%. However, the pace of structural reform slowed down preventing further economic growth.

2.5.  In the period from 2012-14, Ukraine's economic growth continued to fall due to the impact of internal and external factors that, up until the present, contribute to the negative performance in almost all sectors of the economy. In sum, during 2012-13, there was insignificant real GDP growth amounting to only 0.2% annually, created mainly by an increase in domestic demand due to the expansion of the consumer consumption (see Annex 1).

2.6.  The deterioration of the economic situation in the country was the result of unfavorable external conditions and their growing influence on the internal imbalances in the economic system of the country. These factors include: negative foreign exchange market fluctuations in the financial sector, macroeconomic uncertainty, the downgrading of Ukraine's investment rating, etc.).

2.7.  Adverse external conditions, such as the fall in prices and a reduction of global demand for major categories of Ukrainian export goods such as metals, further negatively impacted external demand and economic growth. These factors, and the end of the Euro 2012 investment surge, were exacerbated by a general "cooling" in the investment sphere. In this period, domestic consumer demand played a mitigating role in terms of compensating for the negative trends in the investment sector and in negative fall in external demand.

2.8.  In 2014 the negative trends in the economy of the preceding years intensified as a result of the economic and geopolitical impact of the annexation of the Autonomous Republic of Crimea, the deterioration of relations with the Russian Federation, and the military conflict in eastern Ukraine.

2.9.  By the end of 2014, the impact of the fall in domestic demand and in Ukraine's export markets negatively impacted GDP. In 2014, the depth of the decline of Ukraine's GDP accelerated the real GDP for 2014 decreased by 6.8% in comparison with 2013 (see Annex 1).

2.10.  Meanwhile, these events took place against a background of restrictive social policies and the rapid growth of consumer prices in 2014 which further weakened household consumer spending along with the weakening of production and foreign economic activity.

2.11.  Due to the instability created by the military conflict in eastern Ukraine and the annexation of Crimea, the macroeconomic instability and imbalances in the financial sector of the economy, investors have mainly considered Ukraine to be a high risk investment country.

2.12.  To demonstrate this, in 2014, foreign investors invested US$2.45 billion in the Ukrainian economy. That is 56.8% less than the volume of investments in 2013, 59.2% less than the volume of direct investment in 2012, and 62.2% less than the volume of investment in 2011.

2.1.2  The consumer market situation in Ukraine

2.13.  During 2011-13, Ukraine generally had low inflation. In 2011, consumer prices increased by 4.6%. In 2012, they declined by 0.2%. In 2013, they increased by 0.5%, respectively. This low inflationary environment can be attributed to the stability of the currency market, the lack of pressure from monetary factors, and the low rate of price increases on agricultural and industrial products. In addition, the balanced policies used in the regulation of prices for housing and communal services had a moderating impact on the consumer price index (see Annex 2). Data on savings and expenditures of households can be found in Annex 5.

2.14.  In 2014, however, there was an acceleration of prices of up to 24.9 percent. The reasons for this increase include:

·          the annexation of Crimea, the intensification of the military conflict in eastern Ukraine, and the resulting macroeconomic uncertainty contributed to a decline in consumer confidence and negative expectations about growth a by economic operators;

 

·          the devaluation of Ukraine's national currency, the Hryvnia (UAH), against the U.S. Dollar. In 2014, the Hryvnia depreciated by 97.3% (see Annex 3). This devaluation was subsequently reflected in terms of higher prices for various product groups, where the share of imported products in Ukraine is high. For example, prices for household consumer goods, household appliances, and the costs of products for the daily maintenance of housing, increased by 27.9%; the prices for pharmaceutical products, medical supplies, and medical equipment increased by 44.9%; the cost of clothing and footwear increased by 14.5%;

 

·          consumer prices also increased due to the lag effects from the increase in domestic prices in 2014 by 31.8%. The prices of manufactured food products, beverages, and tobacco products increased by 27.3% and average selling prices of agricultural enterprises increased by 33% in November 2014 compared to December 2013. In 2014, prices for manufacturers also increased because of the rising cost of transportation and other logistic as a part of production costs by 60.7%;

 

·          administratively regulated fees for households and public utilities: in general, prices for the group of fees on "Housing, water, electricity, gas and other fuels" increased by up to 34.3% in 2014.

Table 1 Retail Turnover, 2013-14

 

2013

2014

Retail turnover, million Hryvnia

Growth rate, in %, to preceding year

Retail turnover, million Hryvnia

Growth rate, in %, to preceding year

Ukraine

884 204

109.5

903 535

91.4

including:

 

 

 

 

Donetsk region

89 713

108.5

65 745

63.0

Luhansk region

37 464

108.9

21 970

51.0

Autonomous Republic of Crimea

51 185

112.2

-

-

 

2.1.3  The devaluation of the Hryvnia (national currency)

2.15.  In 2011-13 the fluctuation of the Hryvnia exchange rate in relation to the U.S. Dollar on the interbank market was modest, falling within the range of 7.93 - 8.15 Hryvnia/U.S. Dollar (see Annex 3). In 2011-13 the NBU conducted interventions to influence the dynamics of the Hryvnia exchange rate and to ensure payments to "Naftogaz" in U.S. Dollar for imported gas. The NBU net foreign exchange intervention in 2011-13 was negative and amounted to 3.7, 7.5, and 3.1 billion (in U.S. Dollar equivalent).

2.16.  However, during this period, the macroeconomic imbalances existing in the country deepened. They had been caused by soft demand and the focus in fiscal policy on the current consumption. Real wages increased by 14% and 8% in 2012 and 2013, respectively. In addition, there was increase in government energy subsidies for the population. Because of the gap between the prices of imported gas and domestic prices, the deficit of the National Joint Stock Company "Naftogaz" of Ukraine was almost 2% of GDP in 2013.

2.17.  As a result, public debt exceeded 40% of GDP at the end of 2013. In turn, Ukraine's foreign currency debt reached 65%, significantly increasing currency risk.

2.18.  In 2014, the accumulated macroeconomic and currency imbalances sharpened due to social and political instability, the annexation of Crimea, and hostilities in the east of Ukraine. The foreign currency earnings reduced by 28.7% (compared to 2013). The rate of foreign currency earnings reduction significantly increased from 2.5% in I quarter of 2014 to 53.9% in IV quarter.

2.19.  As a result, Ukraine's deficit of non-cash foreign currency in 2014 amounted to almost US$10 billion equivalent (in 2013 the foreign currency supply exceeded its demand by US$1.6 billion).

2.20.  In the cash segment of the foreign exchange market, the foreign currency demand exceeded supply by US$2.4 billion.

2.21.  However, the diminishment of gold and foreign currency reserves did not allow the National Bank of Ukraine to support the exchange rate of Hryvnia through interventions at the level of the currency sales volumes of previous years (see Annex 2).

2.22.  Therefore, having been subject to negative economic pressures stemming from the political and economic situation in the country, the annexation of part of the territory, armed conflict, the Hryvnia depreciated against the US Dollar on the interbank market by 93.5%.

2.23.  Taking into account that the Hryvnia has greatly depreciated, demand for foreign currency has increased, resulting in permanent stress conditions in the operation of the currency market.

2.24.  The NBU intervention on selling currency could interrupt the trend of a downward spiral, which can be self-reinforcing. However, because of the very limited amount of international reserves (as of 1 March 2015, international reserves fell to US$5.6 billion) as well as awareness of these limited reserves by market participants, intervention actions will not achieve satisfactory results and do not seem to be possible.

2.25.  Taking into account the above mentioned factors it is appropriate to take emergency measures in order to limit the foreign currency demand, in particular, to temporarily reduce imports.

2.1.4  Ukraine's Energy Sector

2.26.  Ukraine's economy is one of the most energy intensive economies in the world with limited domestic energy resources. Data on production, import and export can be found in Annex 6.

2.27.  In particular, the Ukrainian economy depends on natural gas. The natural gas production in Ukraine is insufficient to meet its own needs.

2.28.  At the beginning of 2014 in Ukraine, there was an absolutely unfavorable situation with regard to natural gas consumers. At the beginning of the year, "Gazprom" raised prices and from June stopped all gas supplies. In this difficult situation, the Government of Ukraine had to compensate for the lack of gas by importing from Europe.

2.29.  In 2014, Ukraine managed to begin to diversify its gas supply, increasing its supply of gas from EU sources by 4.0 billion cubic meters from January to November 2014 were re-imported from Poland, Slovakia, Hungary. Over the same period last year, Ukraine imported 2.1 billion cubic meters from Europe, compared with the period two years ago - 0.1 billion cubic meters.

2.30.  The significant resource potential of Ukraine was lost due to annexation of Crimea. A significant part of Ukrainian oil and gas fields are located in the Black Sea basin. During recent years Ukraine has invested the largest amount of funds in gas producing industry in Crimea, in particular investment in the state-owned enterprise "Chernomorneftegaz", which has been collected by Russia. Russian occupation of Crimea has brought real and potential losses to Ukrainian fuel and energy complex amounting to US$300 billion.

2.31.  The escalation of hostilities in eastern Ukraine has caused extreme damage to the Ukrainian coal industry. According to approximate estimates in eastern Ukraine today only 24 of 95 state‑owned mines work at a normal capacity, 57 mines operate in a mode in which only a minimum of staff is employed. In addition, 14 mines were completely destroyed. Some of these mines had produced over one million tons of coal per year.

2.32.  The importance of coal for Ukraine is essential. It is used in thermal power plants to generate electricity for household needs and industry. It is a source of regional employment. In addition, coal-derived energy is used for the needs of agriculture, the production of construction materials, etc.

2.33.  Because of this radical decline in the normal production capacity of Ukrainian mines, at the beginning of 2015, the coal deficit in Ukraine grew to approximately three million tons. This has a negative impact on electricity generation, which in turn, has led to periodic electricity cut-offs for most regions of the country.

2.34.  The factors detailed above explain how the territorial issues have exacerbated the economic crisis in the country. Further, it has had broader effects including a decrease in business activity across the board, a further decline in consumer confidence, and a severe deterioration of the financial condition of enterprises and households.

2.35.  Direct losses from the occupation of the territories of Ukraine, located in the zone of military conflict in the Lugansk and Donetsk regions, as well as the territories of Crimea, are as follows:

Table 2 Direct losses from the occupation of the territories of Ukraine

 

Total

Donetsk region

Luhansk region

AR Crimea

Sevastopol

Population

13.5%

2269600
(52.2% of population in the region)

1514800
(67.6%)

1966600

386200

Industrial products

17.5%

111.1 bln Hryvnia
(54% of total volume in the region)

56.3 bln Hryvnia (83.1%)

22.7 bln Hryvnia

4.1 bln Hryvnia

Agricultural products

4.8%

3540 mln Hryvnia (30.8% of total volume in the region)

1770 mln Hryvnia (27.2%)

6592.8 mln Hryvnia

156,8 mln Hryvnia

Construction work

16.6%

5819.9 mln. Hryvnia

1325.7 mln Hryvnia

2143.9 mln Hryvnia

458.3 mln Hryvnia

Export of goods

16.7%

US$6585.4 mln

US$2976.1 mln

US$914.9 mln

US$99.8 mln

Import of goods

6.6%

US$3056.4 mln

US$831.5 mln

US$1044.5 mln

US$107 mln

Export of services

7.7%

US$489.6 mln

US$132 mln

US$521.7 mln

US$81.3 mln

Import of services

9.5%

US$532.6 mln

US$113.4 mln

US$75.9 mln

US$10 mln

Retail turnover of enterprises

15.1%

28.9 bln Hryvnia

12.3 bln Hryvnia

24 bln Hryvnia

Road freight transportation tons-km

9.9%

2141.7 mln t/km

635.3 mln t/km

597.9 mln t/km

Road passenger transportation

17.1%

3971.6 mln t/km

1502.2 mln t/km

597.9 mln t/km

 

2.36.  Direct losses to the State budget total UAH 9.29 billion in 2014. The military conflict in the east of Ukraine, in addition to the toll on human lives, has led to the destruction and damage of: housing; industrial facilities; road and transport infrastructure; the energy, gas, water supply network, and waste water treatment facilities, public health services facilities, retail establishments, and other facilities.

2.37.  According to the preliminary estimates of local authorities and local governments, as of 30.01.2015, in Donetsk and Lugansk 11.1 thousand different forms of property were damaged due to the military conflict totalling more than UAH 4.3 billion. This includes: 8292 houses valued at to UAH 681.9 million, 438 education, health, physical education and sport facilities valued at UAH 458.2 million, 1461 critical infrastructure objects, including power supply lines and stations valued at UAH 880,5 million, 454 segments of the road transportation infrastructure valued at more than UAH 2 billion. At present, it is not possible to make a final assessment of the estimated value of destroyed industrial facilities, schools, banking institutions, etc.

2.38.  Industrial production was affected the most by the destabilization of the situation in eastern Ukraine. In 2014, industrial production decreased by 10.1% (in 2013 - by 4.3%). In the Donetsk region industrial production it decreased 31.5% and the Lugansk region it decreased by 42%.

2.39.  Since January 2014, industrial production in Ukraine declined by 21.3% overall. Further since January 2015, the industrial crisis in the industry intensified and industrial production fell by 4.2% in that period alone. In Donetsk and Lugansk regions, industrial production fell by 49.9%, and by 87%, respectively.

2.40.  The mining industry was affected the most by the military conflict: in 2014, mining production declined by 13.7%. Most severely, coal mining volumes for the year decreased by 30.5%. The deficit of local raw materials was one of the factors inhibiting the development of metallurgy, the manufacture of coke, the refinement of petroleum products, the supply of electricity and gas.

2.41.  The decrease in production of the sectors above accelerated towards the end of 2014. The only positive results at the end of 2014 were from operations in the food processing industry and in the production of beverages and tobacco (an increase of 2.5%) and in the manufacture of basic pharmaceutical products and pharmaceutical preparations (an increase of 1.9%).

2.42.  The agriculture sector has been slightly less affected. Favorable weather conditions in 2014 led to a record harvest (since the official statistics began). In 2014, there was a record yield of 63.8 million tons vs. 62.3 million tons in 2013. As a consequence, agriculture in 2014, as it had in 2011-13, remained the main economic driver delivering very positive results. The volume of agricultural production in 2014 increased by 2.8% (whereas the average growth for the period of 2011-13 was 10%).

2.43.  However, taking into account that a number of agricultural enterprises in the Donetsk and Lugansk regions were closed, as well as the increased costs from decreased industrial activity and reduced consumer demand, the volume of agricultural production in January 2015 compared to January 2014 fell by 2.4%. In Donetsk region, the decrease of agricultural production was 26% and in Lugansk region it fell by 54.1%.

3  ANALYSIS OF BALANCE OF PAYMENTS SITUATION

3.1.  On the basis of these developments in 2014, the balance of payments was under considerable pressure – the balance of payments deficit amounted to US$13.3 billion. This was nearly the level experienced during the year 2009, which had been a crisis year for the Ukrainian economy. Deficit financing was done through the use of reserve assets which resulted in the reduction of international reserves to US$7.5 billion or 1.4 months of future imports. This downward trend continued in 2015: as of 01.03.2015, the reserves decreased to US$5.6 billion (see Annex 7).

Chart 1 Current and financial accounts              Chart 2 International Reserves

(US$ billion)

            

Source:   NBU.                                                           Source:     NBU.

3.2.  In recent years, the current account deficit greatly exceeded the critical permissible limit (4‑5% of GDP), which caused the accumulation of large external sector imbalances.

Chart 3 Current account balance Chart         Chart 4 Current account balance

                                                                            (US$ billion)

      

Source:   NBU.                                                      Source: NBU.

3.1  Current account

3.3.  The sharp decline in the deficit of the current account to 4.1% of GDP in 2014 was due to the reduction of the imports of goods and services by 27% (see Annex 8). The decline in imports occurred in all product groups due to substantial reduction of domestic consumer and investment demand and the Hryvnia devaluation. Although the rate of decline in imports in 2014 was much higher than the rate of decline of exports, the trade balance still remained negative. The supply of goods can mostly be attributed to the reduction of imports from the Russian Federation (overall, by 45.5%), and in particular, due to lower imports of gas (by 63.1%). Imports share from the Russian Federation decreased to 20.6% (from 27.4% in 2013), while the imports share from the EU increased to 32.4% (from 30.2% in 2013) (see Annex 9).

Chart 5 Trade Balance and REER                       Chart 6 Import structure by regions

                                                                              (%)

         

Source:   NBU.                                                         Source:       SSS.

3.4.  The biggest imports share of goods is in the category of mineral products, specifically mineral fuels. However, the gradual reduction of the intensive use of energy in the Ukrainian economy cause these imports to decline from 32.4 % in 2010 to 24.5% in 2014. The contraction of domestic investment demand in 2013-14 resulted, for the period of 2012-14, in a decrease of machinery products imports by two times. Specifically, their share of imports decreased from 25% in 2012 to 19.5% in 2014. Due to the decline in consumer demand, imports of agricultural goods, industrial products, and cars in 2014 declined by 26.2%, 28.6% and 2.5 times, respectively (see Annex 10).

Chart 7 Import structure                              Chart 8 Merchandise imports change in 2014

(%)                                                                    (US$ billion)

Source:   NBU.                                                    Source:    NBU.

3.5.  The positive effect on Ukraine's current account of the reduction of imports in 2014 was largely negated by the decline in exports of goods and services of 19.5%. This decline was due to non-economic factors: trade barriers imposed by the Russian Federation, the decline in production, and therefore, export capacity due to the military conflict in the Eastern Ukraine, and the trade effects of the temporary occupation of Crimea. An additional factor was the decline in the export of major products in world markets, in particular, in metals and ores and a simultaneous decline in global prices for these goods. Thus, despite the devaluation of the Hryvnia, Ukrainian exporters did not see a net gain from any competitive advantage that the devalued currency could have created.

3.6.  In 2014 there were changes in the structure of exports of goods in terms of the commodities traded as well as the geographic destination of those goods. Due to trade liberalization with the EU, Ukraine's volume of exports to the EU countries increased by 2.1%. The EU's share of Ukraine's total global exports of goods increased to 30.6%. That is compared with 25.8% in 2013 and 24% on average for the period of 2008-13. However, trade restrictions imposed by the Russian Federation caused the decrease of exports to Russia by 34.8%, and Russia's overall share of Ukraine's total global exports fell to 17.7% as compared to 23.2% in 2013 (see Annex 11).

Chart 9 Export of ferrous metals and grains      Chart 10 Export structure by regions

                                                                                (%)

                                                                                Source:     SSS.

3.7.  The category of goods that saw the lowest reduction in exports was agricultural goods (2%). Ukrainian exports to EU countries of these products increased by 6.4%. Thus, the share of food products exports in 2014 exceeded the share of the other major export group, ferrous metals. The steady increase in the share of agricultural exports was due to the increase of the supply of cereals owing to a record harvest during the preceding years. The largest decrease occurred in machinery exports, especially rail transport equipment which was traditionally exported to the Russian Federation and now are banned by the RF. There was also a reduction in the exports of steel products. As described earlier, the steel industry is located in the area of the military conflict and suffered a significant reduction in output (see Annex 12).

Chart 11 Export structure                               Chart 12 Merchandise exports change in       2014

(%)                                                                      (US$ billion)

Source:   NBU.                                                      Source: NBU.

3.8.  In 2014, there also was a sharp reduction in Ukraine’s trade balance surplus for services due to a decrease of income from tourism. The number of visitors to Ukraine rapidly declined by two times, especially visitors from the Russian Federation. Ukraine also saw a 28% loss in revenues from transportation as a result of the destruction of infrastructure in the eastern part of the country, the decrease in overall economic activity, and the decrease in the gas transit (see Annex 8).

Chart 13 Balance of services                               Chart 14 Services

(US$ billion)                                                               (US$ billion)

            

Source:   NBU.

3.9.  In 2014, Ukraine's surplus in the category of "transfers" also decreased due to the reduction of remittances to Ukraine by 23.2%, which was primarily a reduction of remittances from the Russian Federation. However, the negative balance in the category of "income" decreased due to reduced dividend payments from foreign direct investments (by 69.1%) which was connected to the economic recession and the Hryvnia devaluation.

Chart 15 Remittances in Ukraine                        Chart 16 Repayments of investment         income

(US$ billion)                                                               (US$ billion)

             

Source:   NBU.

3.2  Financial and capital account

3.10.  In 2014 there was a reversal of capital flows in the financial account. Opportunities for attracting foreign capital are severely constrained by the instability created by the military conflict. Therefore, in 2014, for the first time during the last five years, Ukraine experienced a deficit in its capital and financial account of US$8.1 billion (see Annex 8). Due to the deteriorating investment climate, net public sector loans and bonds totalling US$3.2 billion did not cover the outflow of private sector funds which was –US$5.2 billion). The rollover of private sector external liabilities fell to 86 %, primarily due to the low rollover of the real sector (64%), which decreased for the first time more than 100% since the crisis of 2009.

3.11.  The public sector has attracted loans and macro-financial assistance from the EU (EUR 1.6 billion), the World Bank (US$1.3 billion), Canada (US$0.2 billion US Dollars), and Japan (US$0.1 billion) and has issued Eurobonds under a Government guarantee for US$1 billion.

Chart 17 Financial and capital account              Chart 18 Rollover on external liabilities     of the private sector

(US$ billion)                                                               (%)

Source:   NBU.                                                           Source:     NBU.

3.12.  Net FDI inflows were the lowest since 2006 (US$0.4 billion). In addition, in 2014, Ukraine had to make significant debt repayment of trade credits of US$3.6 billion during 9 months and a US$3.1 billion repayment of Ukrainian National Joint Stock Company "Naftogaz" in the fourth quarter.

3.13.  The growth in the trend of maintaining currency outside of banks continued (reaching US$2.6 bln) due to high expectations about further devaluation of the Hryvnia. Policy support for the fixed exchange rate of the Hryvnia in 2010-13 and at the beginning of 2014 caused the accumulation of large imbalances that resulted into increased demand for foreign currency.

Chart 19 Foreign direct investment                    Chart 20 Foreign cash holdings outside     banks

(US$ billion)                                                               (US$ billion)

      

Source:   NBU.                                                           Source:     NBU.

3.3  External debt

3.14.  According to the NBU the external debt as of the end of 2014 amounted to US$126,3 billion, having decreased by US$15,8 billion since the beginning of 2014. Financial and corporate sectors reduced their external liabilities by US$19,1billion, but public debt grew by US$3,4 billion as a result of borrowings from the international financial institutions (see Annex 13).

Chart 21 Gross external debt (eop)

(US$ billion)

Source:   NBU.

3.4  Balance of payments forecast for 2015

3.15.  In 2015, Ukraine expects to further reduce its current account deficit to 1-2 % of GDP. This is due to reduced imports caused by the decline in domestic demand and currency devaluation. However, despite the positive impact of increased price competitiveness of Ukrainian goods, exports continue to decline due to a number of such factors:

·         the military conflict in the eastern part of the country and restrictive trade measures applied by the Russian Federation;

 

·         current downward trend in world prices for metals and ores;

 

·         Ukraine's continuing high dependence on imported raw materials; and

 

·         increasing competition in foreign markets.

 

3.16.  In 2015, the repayment of financial account surplus is forecasted, despite the low rollover on external liabilities of the private sector, which is expected to be at 2014. Net FDI is forecasted to increase to 1.2% of GDP. In addition, further outflows of currency outside of banks are not expected and repayment of trade credits. In addition, the IMF's (Extended Fund Facility) is expected to attract official financing from many other international organizations and countries.

Chart 22 Current account balance                      Chart 23 Capital and financial account

(US$ billion)                                                               (US$ billion)

           

Source:   NBU.                                                           Source:     NBU.

3.17.  However, the potential outflow of foreign currency to cover debt remains high. Thus, Ukraine expects to only make scheduled payments in foreign currency on foreign debt to non‑residents in 2015 as follows: US$8.2 billion for the banking sector and US$14.0 billion for the corporate sector, excluding US$8.3 billion for the public sector.

4  DOMESTIC POLICY MEASURES TAKEN IN ORDER TO RESTORE EQUILIBRIUM ON A SOUND AND LASTING BASIS

4.1  Public finances improvement

4.1.  The main parameters of the State Budget of Ukraine for 2015 include:

·          State revenues amounting to 502.3 billion Hryvnia, including revenues of the State Budget of Ukraine of 474.8 billion Hryvnia and revenues of the special fund of the State Budget of Ukraine of 27.5 billion Hryvnia;

 

·          Government expenditures amounting to 566.9 billion Hryvnia, including expenditures of the State Budget of Ukraine of 537.7 billion Hryvnia and expenditures of the special fund of the State Budget of Ukraine of 29.3 billion Hryvnia;

 

·          The amount of loan repayments to the state budget amounting to 4,8 billion Hryvnia and the amount of loans from the state budget amounting to 16.0 billion Hryvnia;

 

·          Limiting the amount of government deficits amounting to 75.8 billion Government debt limit of 1394.4 billion Hryvnia. The volume of loans totalling 397.4 billion Hryvnia, repayment of 251.6 billion Hryvnia. The costs of servicing public debt is 92.7 billion Hryvnia.

 

4.2.  In order to improve its public finances, Ukraine is taking steps to increase revenues and reduce expenditures of the State Budget.

4.3.  Amendments of the State Budget of Ukraine were based on revised macroeconomic indicators, in particular:

·          the exchange rate of the national currency;

·          the National Bank of Ukraine's discount rate of 30%;

·          the results of negotiations with the IMF on the adoption of a new cooperation program (increase in tariffs for natural gas, hot water and heating).

 

4.4.  Based on the factors above, forecasted increases in revenues of the State budget are based on: VAT; the rental fee and the fee for the other natural resources use; the transportation rent; charges for fuel and energy resources; import duty; and the corporate profit tax. Cost reductions are being made in the State budget in terms of a reduction of spending on education subsidies, grants for training labor, medical grants, and transfers to the Pension Fund.

4.2  Structural reforms

4.5.  Tax reform. To improve the business environment, Ukraine took measures to reduce corporate costs for tax accounting and government spending on tax administration. It reduced the tax burden, in particular, the number of taxes were reduced from 22 to 11. It conducted fiscal decentralization (increasing the financial capacity of local budgets), improved the principles for the control of transfer pricing.

4.6.  Creating a favorable business climate. To move towards deregulation and create a favorable business climate, the Government of Ukraine identified the following immediate priorities:

·          trade and export promotion,

·          deregulation and improvement of the business environment,

·          attracting investment,

·          reducing the role of regulatory and supervisory authorities, and

·          waging a systematic fight against corruption.

 

4.7.  Reform of the energy sector. The Government of Ukraine is taking measures to ensure the transition to a more energy-efficient economy, including energy-savings and the reduction of energy consumption with the introduction of innovative technologies that will reduce the energy intensity of its GDP. It is implementing Government policies aimed at ensuring Ukraine's energy independence, the diversification of its energy supply, the introduction of market rates in energy sector, and the reform of subsidies in this area.

4.8.  The reform of public enterprises and privatization of state property. In order to reform the public sector of the economy and to make it more effective, the Government is conducting a large-scale and transparent privatization of state property, it is conducting an international audit of public companies, and it is implementing programs to ensure the effectiveness of strategic state property.

4.9.  Strengthening macroeconomic financial stability. The Government is strengthening macroeconomic financial stability by: (1) restoring price stability; and (2) improving the financial condition of the banking system through recapitalization, the reduction of loans to related parties, and the reduction of problem assets. These measures will provide a stable macroeconomic environment and credit support from the banking system, which are preconditions for the competitiveness of Ukrainian business in the world.

5  DESCRIPTION OF THE RESTRICTIONS APPLIED FOR BALANCE OF PAYMENTS PURPOSES, THEIR LEGAL BASIS, AND STEPS TO REDUCE INCIDENTAL PROTECTIVE EFFECTS

5.1.  The accumulation of a number of macroeconomic imbalances, problems attracting private sector external financing, and limitations on export growth due to instability stemming from the military conflict have significantly influenced Ukraine’s balance of payments.

5.2.  In connection with the balance of payments problem, the Verkhovna Rada of Ukraine has adopted the Law of Ukraine "On measures concerning stabilization of the balance of payments of Ukraine in compliance with Article XII of the General Agreement on Tariffs and Trade 1994" (hereinafter - the Law of Ukraine).

5.3.  On 25 February 2015, this law came into force (according to the Resolution of the Cabinet of Ministers of Ukraine as of 16.02.2015 № 119-r).

5.4.  This law was developed in accordance with the provisions of Article XII GATT 1994 and the Understanding on Balance-of-Payments Provisions of the GATT 1994.

5.5.  This law aims at setting temporarily, for a period of 12 months, an import surcharge on goods imported into the customs territory of Ukraine under the customs regime of import, regardless of the country of origin of such goods or free trade agreements (treaties) signed by Ukraine.

5.6.  The goods subject to import surcharge are those imported into the customs territory of Ukraine, the customs value of which exceeds the equivalent of EUR 150.

5.7.  The base on which the import surcharge will be assessed is the customs value of goods imported into the customs territory of Ukraine.

5.8.  The import charge is levied at the following rates:

·          10% for goods classified in Chapters 1-24 (HS2012);

·          5% for goods classified in Chapters 25-97 (HS2012);

·          10% for all goods imported (brought) by persons into the customs territory of Ukraine.

 

5.9.  The import surcharge is not imposed on essential goods that are imported to the customs territory of Ukraine, in particular:

·          oil classified in subheading 2709 00 9000 (HS2012);

·          natural gas classified in subheadings 2711 11 0000 and 2711 21 0000 (HS2012);

·          non-irradiated fuel elements (FE), classified in subheading 8401 30 0000 (HS2012);

·          electrical energy, classified in subheading 2716 00 00 00 (HS2012);

·          coal classified in subheadings 2701 110000, 2701 121000, 2701 129000, 2701 190000, 2704 001900, 2704 003000, 2708 200000, 2713 110000, 2713 120000 (HS2012);

·          gasoline, mazout (residual fuel oil), and diesel fuel classified in subheading 2710 (HS2012), except subheadings 2710 91 00 00 and 2710 99 00 00;

·          medical devices for hemodialysis and treatment of cancer patients (according to the Resolution of the Cabinet of Ministers of Ukraine as of 16.02.2015 No.63), pharmaceutical products and compounds for their production, that are not produced in Ukraine, classified in Chapters 28, 29, (HS2012) (according to the Resolution of the Cabinet of Ministers of Ukraine as of 17 November 2004 р. No.1568);

·          goods donated free of charge to Ukraine by other governments or international organizations and goods imported into the customs territory of Ukraine within the framework of international technical assistance under international (intergovernmental) agreements ratified by the Verkhovna Rada of Ukraine;

·          goods that are imported into the customs territory of Ukraine within the framework of international technical assistance projects such as: the G8 initiative "Global Partnership Against the Spread of Weapons and Materials of Mass Destruction"; the decommissioning of the Chernobyl Nuclear Power Plant and the transformation of the "Shelter" into an ecologically safe system;

·          humanitarian or charity assistance and goods imported by the Red Cross Society of Ukraine;

·          goods paid for by grants provided under the Global Fund to Fight AIDS, Tuberculosis and Malaria in Ukraine;

 

5.10.  A detailed list of goods by HS code is supplied in Annex 14.[1]

5.1  Justification for the import surcharge imposition and the period of its application

5.11.  The key aim of introducing an import surcharge is the improvement of balance of payments. The surcharge was applied to improve the state of international reserves of the National Bank of Ukraine and to help forestall a further serious reduction in monetary reserves.

5.12.  The theory of supply and demand was used as the basis for calculating e the rate of the import surcharges and the duration of their validity.

5.13.  The implementation of the import surcharge will reduce the overall rate of imports, affecting the balance of payments. It will also create a redistributive effect, i.e., with the increasing cost of imported goods, consumer demand will be reoriented to domestically-produced goods. In turn, the increased demand for domestic products, will affect the growth of domestic production in related industries. Though, it was also considered that the effective stimulation of domestic production is only possible with import surcharge imposed for a period from 6 months to one year.

5.14.  Calculations show that the introduction of import surcharge for the period specified will not cause a significant increase in domestic prices and will not negatively impact a domestic demand, which, in turn, will provide an opportunity to intensify domestic production, increase GDP and improve the balance of payments.

5.2  Estimated effect from an import surcharge and the impact of measures on domestic producers

5.15.  The estimated effects from an import surcharge were based on the following information:

·          increase in the value of imports of agricultural products for HS Chapters 1-24 to 10%;

·          increase in the value of imports of industrial goods for HS Chapters 25-97 to 5%;

·          data provided by the State Statistics Service of Ukraine on the volume of imports to Ukraine in 2014 of goods, except for essential goods such as coal, oil, petroleum products (gasoline, diesel), natural gas, non-irradiated fuel elements (cartridges ), and electricity; and

·          forecasts of total imports of goods in 2015.

 

5.16.  During the calculations, it was also assumed that by introducing of temporary import surcharge, imports will partly decrease due to the increase in the cost of goods and the reorientation of consumer demand for cheaper products, particularly for domestically-produced goods. The structure of imports was also a factor in determining the level of rates of the import surcharge. The results of the calculations predicted that the decrease in imports of goods from the introduction of import surcharge will be approximately US$1.25 billion, specifically, a US$0.25 billion reduction in imports of agricultural products and a US$1 billion reduction in imports of industrial products. Accordingly, an increase in GDP as a whole is estimated at about 1 percentage point.

5.17.  Thus, introducing of temporary import surcharge for all imported goods (other than certain essential goods) will have additional positive impact on the economic growth of Ukraine, namely an increase in demand for domestic products through the reorientation of consumer demand, leading to an increase in domestic production.

5.18.  It should be noted that imported agricultural products and industrial products have different conditions in the domestic market. Thus, domestic agricultural production now fully satisfies domestic needs and the supply is increasingly used for export. The share of imported products that are used as inputs into further production of other products is 8% overall, and is 13.2% in the case of manufacturers of food, beverages and tobacco products. Introduction of an additional import surcharge may have some restrictive effect on the confectionery industry, brewing industry and the tobacco manufacturers, but will have a positive effect and stimulate the production of meat and dairy products.

5.19.  In industrial production as a whole, the share of imported products that are used as inputs into the production of other goods  is quite significant, 41.5% overall. For the production of chemicals and chemical products, the share is 75%, for the production of textiles, clothing, leather, leather goods and other materials the share is 63%, for the production of coke and refined petroleum products the share is 56% (petroleum products), for the manufacture of electrical equipment the share is 51%, for the manufacture of rubber and plastic products and other non‑metallic mineral products the share is 35%.

5.3  Legal framework and the steps taken for reduce adverse affect of implementing the import surcharge

5.20.  The import surcharge was introduced by the Law of Ukraine "On measures concerning stabilization of the balance of payments of Ukraine in compliance with Article XII of the General Agreement on Tariffs and Trade 1994" of 28 December 2014 No.73-VIII and the Law of Ukraine "On Amending the Customs Code of Ukraine (concerning stabilization of the balance of payments)" of 28 December 2014 No.74-VIII.

5.21.  The legal basis for the introduction of the import surcharge is Article XII of the General Agreement on Tariffs and Trade 1994 (hereinafter - the GATT 1994) and the Understanding on the Balance of Payments Provisions of the GATT 1994, (hereafter – "the Understanding").

5.22.  Pursuant to paragraph 9 of the Understanding, in WTO document WT/BOP/N/78 of 21.01.2015, Ukraine notified measures in connection with the balance of payments and its readiness for starting consultations with the Committee on Balance-of-Payments Restrictions in accordance with Article XII of GATT 1994.

5.23.  Part one of Article XII of GATT 1994 is an exception to the general provisions of the GATT 1994 and provides for the right of the Member to safeguard its external financial position and its balance of payments by restricting the quantity or value of imported goods. Pursuant to that, it should be noted that the Law "On measures concerning stabilization of the balance of payments of Ukraine in compliance with Article XII of the General Agreement on Tariffs and Trade 1994" provides for the temporarily introduction of price measure in the form of import surcharge at rates that are not prohibitive .

5.24.  Article XII:2(a) of GATT 1994 established that import restrictions instituted, maintained or intensified by a Member shall not exceed those necessary:

·          to forestall the imminent threat of, or to stop, a serious decline in its monetary reserves;

·          in the case of a party with very low monetary reserves, to achieve a reasonable rate of increase in its reserves.

 

5.25.  Ukraine has taken the decision to introduce the import surcharge based on data from the National Bank of Ukraine and the Ministry of Finance of Ukraine, which describe the increasingly negative trends in the foreign exchange market and the financial sector, macroeconomic uncertainty, the reduction of Ukraine's investment rating, and the deteriorating economic situation in the country as a whole.

5.26.  Such measures were applied to improve the state of international reserves of the National Bank of Ukraine and to help forestall a further serious reduction in monetary reserves, as well to restore the balance of payments.

5.27.  At the same time, the measures imposed by Ukraine do not exceed the level necessary to achieve these goals. That is, the introduction of 10% import surcharge for agricultural products and foodstuffs and 5% import surcharge on industrial goods, will have no direct impact on the price increase.

5.28.  Thus, as provided in paragraph 4 of the Understanding, Ukraine's introduction of a surcharge in relation to its balance of payments recognizes that the surcharge applies only to regulate the total level of imports and will not exceed the extent that is necessary to resolve the balance of payments situation.

5.29.  It should be noted that that the introduction of the import surcharge is only one of the of the internal policy measures being taken by Ukraine to restore its balance of payments on a sound and lasting basis.

5.30.  While the introduction of the import surcharge is essential to restore the balance of payments of the Government, Ukraine is taking additional measures to achieve this goal. In this context, Ukraine has undertaken the following additional initiatives such as:

·          encouraging and increasing production,

·          promoting export and investments into productive activities,

·          strengthening macroeconomic financial stability by improving the financial condition of the banking system,

·          changing legislation to minimize the risk of the financial system of the country and eliminating unfair business practices by monetary market participants,

·          increasing the capitalization of banks,

·          protecting the interests of depositors and creditors of banks, and

·          establishing effective risk management mechanisms.

 

5.31.  At the same time, the Government is monitoring closely special factors that may affect the reserves of Ukraine, such as the use of special external loans and other resources.

5.32.  Subject to the provisions of Article XII:3(b) of GATT 1994 and paragraph 4 of the Understanding, the Law of Ukraine "On measures concerning stabilization of the balance of payments of Ukraine in compliance with Article XII of the General Agreement on Tariffs and Trade 1994," Article 5 contains a list of essential goods that are exempt from the import surcharge. The list of such goods is provided in Annex 14.[2]

5.33.  In view of the provisions of Article XII:2(b) GATT 1994, the introduction of import surcharge is provided temporarily for a period of 12 months.

5.34.  Thus, it should be emphasized that the measure is temporary with the possibility of gradual liberalization provided to improve the balance of payments situation.

5.35.  The Understanding does not set requirements for the level of import surcharge rates. As previously mentioned, in determining the specific import surcharge rates and the duration of their validity the theory of supply and demand was used as a basis for calculations. The different domestic conditions for imported agricultural and industrial products were also considered.

5.36.  Summing up, the introduction of an additional import surcharge as a way to restore the balance of payments is conducted in accordance with the provisions of Article XII of GATT 1994 and the Understanding.

6  CONDITIONS FOR THE RELAXATION AND TERMINATION OF THE MEASURE

6.1.  The accumulation of a number of macroeconomic imbalances, problems with attracting of external financial resources by private sector, and limited export prospects due to instability created by the military conflict, significantly influenced Ukraine's balance of payments. The introduction of import surcharge will reduce non-energy imports and thus, will help lead to an equilibration of the balance of payments.

6.2.  Provided that the effect of the import surcharge will be seen in the second quarter 2015, it is expected to reduce imports by about US$250-300 million in a quarter of a year. It is estimated that in 2015, the effect from the introduced import surcharge may be US$0.8 billion. In addition, the increased supply by domestic manufacturers will increase in GDP by 1%.

Chart 24 Import of goods forecast                      Chart 25 Trade balance

(US$ billion)                                                               (US$ billion)

      

Source:   NBU estimations.                                          Source:     NBU estimations.

6.3.  Based on the factors above, it is important to emphasize that the import surcharge is a price‑based temporary measure for a period of 12 months, set at a non-prohibitive rates. If the situation with the balance of payments is improved by the end of 2015, and the equilibrium of the balance of payments is restored to at least the level of 2013, Ukraine does not exclude the possibility of removing the surcharge before end of the 12 month period.

 

_______________

 


ANNEXES

Annex 1. Gross domestic product

Annex 2. Consumer price index

Annex 3. Official exchange rate of Hryvnia to US Dollars

Annex 4. Income of Households

Annex 5. Expenditure and Saving of Households

Annex 6. Export, import and production of energy resources in 2013-14

Annex 7. International reserves of Ukraine

Annex 8. Ukraine's balance of payments

Annex 9. Geographical structure of import of goods into Ukraine in 2013-14

Annex 10. Structure of imports of goods into Ukraine in 2013-14

Annex 11. Geographical structure of exports of goods from Ukraine in 2013-14

Annex 12. Structure of exports of goods from Ukraine in 2013-14

Annex 13. Gross external debt position of Ukraine

Annex 14. List of goods subject to import surcharge and exemptions (essential goods).[3]

 

 


Annex 1

Gross Domestic Product

 

GDP at current prices,
Hryvnia million

At constant prices of 2010, in % over previous yeara

volume index of GDP

deflator of GDP

2010

1 079 346

104,1

113,7

2011

1 299 991

105,5

114,2

2012

1 404 669

100,2

107,8

2013

1 465 198

100,0

104,3

2014a

1 566 728

93,2

114,8

a                         Except temporarily occupied Autonomous Republic of Crimea.

Annex 2

Consumer price index

 

Consumer Price Index

December to December of previous year

to previous year

2008

122,3

125,2

2009

112,3

115,9

2010

109,1

109,4

2011

104,6

108,0

2012

99,8

100,6

2013

100,5

99,7

2014a

124,9

112,1

a             Except temporarily occupied Autonomous Republic of Crimea.

 

 

Annex 3

Official exchange rate of Hryvnia to US Dollars

 

2011

2012

2013

2014

2015

January

February

US$100

796.76

799.10

799.30

1188.67

1581.27

2447.99

 

 


Annex 4

Income of Households

(Mln Hryvnia)

 

Total

Wages and salaries

Operating surplus, mixed income

Property income (receivable)

Social benefits and other current transfers receivable

including:

Disposable income

social benefits

other current transfers

social transfers in kind

total

per capita, Hryvnia

2010

 

 

 

 

 

 

 

 

 

 

І Quarter

228 598

94 829

24 832

14 773

94 164

53 491

172 959

3 771

ІІ Quarter

266 506

110 448

33 188

14 618

108 252

61 448

202 906

4 423

ІІІ Quarter

288 388

114 112

56 039

15 647

102 590

60 510

228 554

4 983

IV Quarter

317 683

130 164

45 966

22 818

118 735

61 764

243 530

5 309

2011 *

 

 

 

 

 

 

 

 

 

 

І Quarter

265 528

112 719

30 589

14 807

107 413

62 179

6 875

38 359

200 898

4 391

ІІ Quarter

299 957

127 616

38 589

14 690

119 062

67 193

8 087

43 782

228 937

5 007

ІІІ Quarter

328 461

130 999

71 585

15 676

110 201

67 050

8 735

34 416

265 939

5 816

IV Quarter

357 059

149 732

57 749

22 886

126 692

66 322

9 984

50 386

275 457

6 027

2012 *

 

 

 

 

 

 

 

 

 

 

І Quarter

296 569

130 089

32 424

14 925

119 131

67 226

6 977

44 928

223 807

4 907

ІІ Quarter

345 295

147 339

43 569

16 694

137 693

76 341

10 040

51 312

263 130

5 771

ІІІ Quarter

371 244

147 902

73 956

19 692

129 694

79 819

7 936

41 939

298 764

6 552

IV Quarter

394 089

167 883

62 471

23 309

140 426

77 658

8 416

54 352

305 399

6 698

2013*

 

 

 

 

 

 

 

 

 

 

І Quarter

329 252

141 021

36 157

15 686

136 388

78 828

10 052

47 508

251 242

5 518

ІІ Quarter

372 030

157 970

50 676

17 069

146 315

81 063

11 248

54 004

283 738

6 234

ІІІ Quarter

394 857

156 712

80 568

19 427

138 150

81 335

13 911

42 904

315 703

6 938

IV Quarter

433 267

178 034

73 470

27 035

154 728

82 621

16 680

55 427

339 668

7 467

2014*

 

 

 

 

 

 

 

 

 

 

І Quarter

340 783

144 572

39 307

18 051

138 853

81 870

11 487

45 496

260 362

5 735

ІІ Quarter

385 347

157 059

54 482

21 977

151 829

83 231

14 150

54 448

296 949

6 901

ІІІ Quarter

396 760

158 911

83 696

23 516

130 637

73 057

16 884

40 696

318 382

7 400

Since ІІ quarter 2014 data are presented except the temporarily occupied territories of the Autonomous Republic of Crimea.


Annex 5

Expenditure and Saving of Households

(Mln Hryvnia)

 

Total

Procurement of goods and services

Property income (payable)

Current taxes on income, wealth and other payable current transfers

including:

Accumulation of nonfinancial assets

Increase of financial assets

of which:

Saving

Expenditure

current taxes on income, wealth, etc.

social contributions

other current transfers

increase of money deposits and saving in securities

saving in foreign exchange

loans, receivable excluding the payable

2011*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

І Quarter

265 528

220 606

7 920

18 351

12 940

3 112

2 299

180

18 471

13 417

18 734

-1 989

18 651

246 877

ІІ Quarter

299 957

249 075

6 550

20 688

15 141

3 330

2 217

-1 144

24 788

15 398

17 568

884

23 644

276 313

ІІІ Quarter

328 461

265 836

6 761

21 345

15 545

3 490

2 310

18 212

16 307

4 525

22 398

-1 037

34 519

293 942

IV Quarter

357 059

288 732

7 822

23 394

17 060

3 888

2 446

13 608

23 503

8 778

23 817

-6 172

37 111

319 948

2012*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

І Quarter

296 569

255 392

6 832

21 002

15 076

3 440

2 486

-111

13 454

16 247

9 722

-6 420

13 343

283 226

ІІ Quarter

345 295

290 323

7 139

23 714

17 178

3 751

2 785

221

23 898

21 236

3 228

-5 096

24 119

321 176

ІІІ Quarter

371 244

305 519

6 253

24 288

17 386

3 825

3 077

13 728

21 456

11 965

21 755

-609

35 184

336 060

IV Quarter

394 089

327 837

7 793

26 545

19 076

3 940

3 529

4 687

27 227

18 344

23 228

-1 417

31 914

362 175

2013*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

І Quarter

329 252

270 355

7 261

23 241

16 143

3 834

3 264

381

28 014

23 878

1 015

791

28 395

300 857

ІІ Quarter

372 030

313 709

7 610

26 678

18 156

4 181

4 341

2 015

22 018

33 764

-1 814

1 596

24 033

347 997

ІІІ Quarter

394 857

323 795

8 214

28 036

18 684

4 240

5 112

16 731

18 081

18 838

11 606

3 301

34 812

360 045

IV Quarter

433 267

349 765

8 352

29 820

19 960

4 237

5 623

6 975

38 355

20 969

15 666

270

45 330

387 937

2014*

 

 

 

 

 

 

 

 

 

 

 

 

 

 

І Quarter

340 783

288 334

8 405

26 520

16 374

3 679

6 467

2 552

14 972

27 461

25 266

19 441

17 524

323 259

ІІ Quarter

385 347

330 552

6 887

27 063

18 138

4 149

4 776

-1 652

22 497

17 957

-8 751

-2 256

20 845

364 502

ІІІ Quarter

396 760

322 743

6 874

30 808

18 893

4 243

7 672

13 103

23 232

-18 386

5 233

2 529

36 335

360 425

Since ІІ quarter 2014 data are presented except the temporarily occupied territories of the Autonomous Republic of Crimea.


Annex 6

Export, import and production of energy resources, 2013-14

(Coala)

 

Export

Import

Production

 

US$ thousands

tons

average price, US$/ton

US$ thousands

tons

average price, US$/ton

US$ thousands

tons

2701 HS 2012

 

 

 

 

 

 

 

 

2013

735 890.2

8 520 954.3

86.4

1 971 275.6

14 124 004.5

139.6

 

84 275 300.0

2014

521 137.3

7 045 526.8

74.0

1 768 721.2

14 697 341.9

120.3

 

63 585 700.0

2702 HS 2012

 

 

 

 

 

 

 

 

2013

17.3

395.5

43.7

150.9

1 864.2

80.9

 

 

2014

5.7

120.0

47.2

105.4

1 494.7

70.5

 

 

Electric energya

 

 

 

 

 

 

 

 

 

Export

Import  

Production 

 

US$ thousands

kWt/hr

average price, US$/ kWt/hr

US$ thousands

kWt/hr

average price, US$/ kWt/hr

US$ thousands

kWt/hr

2716 HS 2012

 

 

 

 

 

 

 

 

2013

580 194.5

9 928 968 047.0

0.058

1 722.6

38 712 731.0

0.044

 

193 808 000 000.0

2014

485 927.7

8 523 477 841.0

0.057

4 138.8

88 933 108.0

0.047

 

181 870 800 000.0

Gas1

 

 

 

 

 

 

 

 

 

Export

Import

Production

 

US$ thousands

1000 m3

average price, US$/1000 m3

US$ thousands

1000 m3

average price, US$/1000 m3

US$ thousands

1000 m3

271121 HS 2012

 

 

 

 

 

 

 

 

2013

-

-

-

11 538 192.2

27 972 035.1

412.5

 

19 635 700.0

2014

-

-

-

5 694 635.6

19 465 949.9

292.5

 

19 070 500.0

Oila

 

 

 

 

 

 

 

 

 

Export

Import

Production

 

US$ thousands

tons

average price, US$/ton

US$ thousands

tons

average price, US$/ton

US$ thousands

tons

2709 HS 2012

 

 

 

 

 

 

 

 

2013

-

-

-

630 280.2

761 058.2

828.2

 

2 169 500.0

2014

27 351.3

41 263.0

662.9

146 532.8

178 613.2

820.4

 

2 031 800.0

Oil productsa

 

 

 

 

 

 

 

 

 

Export

Import

Production

 

US$ thousands

tons

average price, US$/ton

US$ thousands

tons

average price, US$/ton

US$ thousands

tons

2710 HS 2012

 

 

 

 

 

 

 

 

2013

635 810.5

910 488.6

698.3

6 362 983.9

6 478 556.4

982.2

 

 

2014

510 091.0

729 938.8

698.8

6 685 168.7

7 242 879.5

923.0

 

 

a             Except temporarily occupied territory of Autonomous Republic of Crimea.


Annex 7

International reserves of Ukraine, by end of period

(US$ million)

 

2014

2015

 

Jan

Feb

Mar

Apr

May

June

July

Aug

Sept

Oct

Nov

Dec

Jan

Feb

Official reserve assets

17806

15462.32

15086

14226.27

17899

17083

16070

15928

16385

12587

9966

7533

17806

15462.32

*Foreign currency reserves

16070

13637

13300

12420.59       

16274

15380

14379

14260

14815

11578

9058

6618

16070

13637

*IMF reserve position

0.030

0.030

0.030

0.030

0.030

0.030

0.030

0.030

0.030

0.030

0.030

0.030

0.030

0.030

*SDRs

31.230

16.080

16.060

28.500

6.240

6.260

15.390

1.680

1.110

20.320

3.780

3.740

31.230

16.080

*Gold

1704.4

1809.1

1769.3

1777.2

1618.2

1697.3

1675.3

1666.9

1568.7

988.7

903.8

911.1

1704.4

1809.1

*Other reserve assets

-

-

-

-

-

-

-

-

-

-

-

 

-

-

 

Annex 8

Ukraine's Balance of Payments

Description

2013

2014

2013

2014

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

CURRENT ACCOUNT

-3195

-2265

-6012

-5006

-1523

-941

-1329

-1480

-16478

-5273

GOODS AND SERVICES (balance)

-3271

-2171

-5300

-4852

-1512

-924

-1127

-1720

-15594

-5283

EXPORTS OF GOODS AND SERVICES

19851

20786

22546

22299

18030

18008

16982

15465

85482

68485

IMPORTS OF GOODS AND SERVICES

-23122

-22957

-27846

-27151

-19542

-18932

-18109

-17185

-101076

-73768

GOODS (balance)

-4129

-3133

-7341

-5374

-1956

-869

-1216

-2024

-19977

-6065

EXPORTS OF GOODS

15630

15916

15987

17464

14425

14830

13612

12392

64997

55259

IMPORTS OF GOODS

-19759

-19049

-23328

-22838

-16381

-15699

-14828

-14416

-84974

-61324

SERVICES (balance)

858

962

2041

522

444

-55

89

304

4383

782

EXPORTS OF SERVICES

4221

4870

6559

4835

3605

3178

3370

3073

20485

13226

Transportation

1912

2036

2201

2115

1623

1505

1534

1316

8264

5978

railway transport

356

458

463

338

289

262

231

264

1615

1046

sea transport

278

272

280

294

229

183

214

205

1124

831

air transport

313

320

355

346

268

259

312

231

1334

1070

other transport

965

986

1103

1137

837

801

777

616

4191

3031

Travel

568

1249

2570

696

448

416

487

261

5083

1612

Construction services

31

42

118

84

58

27

69

55

275

209

Financial services

66

85

121

77

60

53

52

56

349

221