Ukraine Archives - Economy Watch

Is Ukraine’s Dependence on IMF Aid Actually Doing More Harm than Good?

Ukraine has undergone a recent wave of political, social, and economic instability well documented in the media. Rampant corruption, a flagging economy, and uncertainty over its future have left the nation in desperate straits.

To pay its obligations, it has relied heavily on loans from the International Monetary Fund (IMF); loans that it may not be able to repay. In addition, the nation may not be finished borrowing from the IMF.

IMF Obtains Commitment from Ukraine to End Corruption

The International Monetary Fund has been in talks with the Ukraine regarding a $17.5 billion bailout. That bailout was in jeopardy due to rampant corruption among those in Ukraine’s capital of Kiev. This week, after sharp warnings from the IMF, the Ukraine has vowed to pursue reforms aimed at cleaning up its corruption problems.

Ukraine Passes Budget, Additional Bailout Funds Possible

Ukraine’s parliament has finally approved a new budget for 2016. The budget was a compromise designed to satisfy demands of the International Monetary Fund (IMF) if Ukraine wanted to receive $17.5 billion in bailout funds, the distribution of which had been delayed pending the adoption of a conforming budget. The bailout funds were intended to help Ukraine escape a devastating economic recession.

World Bank to Provide $500 Million (USD) Loan to Ukraine to Support Economic Reforms

The Ukraine has been embattled in both a military sense and economically for the past year. On August 25, 2015, the World Bank’s Board of Executive Directors approved a $500 million (USD) loan designed to finance a multi-sector reform and development policy enacted by the Ukraine. The reforms and financing should support a number of important reforms designed to improve the public sector as well as the business environment, energy sector, and social assistance programs.

Ukraine Economy Plummets in the First Quarter

Ukraine’s economy contracted by an amazing 10.2 percent in 2014 and 17.6 percent in Q1 2015, stemming in part from a long-term civil war where eastern Ukrainians are fighting for autonomy. Manufacturing output dropped to around 40 percent, due to the government losing a great deal of manufacturing centers to eastern rebels, causing the nation to lose 20 percent of the overall economy. Ukraine was already in a two-year recession before the conflict erupted.

Ukraine on the Edge of an Economic Crisis

Some of the largest retailers throughout Ukraine are noticing signs of a potential economic crisis. Though warehouses across the nation continue to hum with workers, the deteriorating economy has meant that most businesses are barely keeping their heads above water.

According to economic experts, if Kiev cannot find a way to generate billions of dollars quickly, the country could be dealing with an economic catastrophe. Many people believe Russia has bullied this smaller country and battered their economy.

The Reality of Ukraine’s Oil and Gas Investment Climate

The Ukrainian government has repeatedly claimed it is doing its best to improve the oil and gas investment climate, but official statements are the opposite of the reality, as Prime Minister Arseniy Yatsenyuk is leading the great deception.

Foreign Direct Investment in Troubled Ukraine

Domestic policy crisis, Crimea’s loss, war in the south-east of Ukraine, and Russia’s aggression amid the lack of any thorough economic reforms and a single decision making unit built-up in Kyiv have triggered Ukraine’s loss of direct foreign investment in the first nine months of 2014. Over this period, Ukraine has lost 16.6% of all direct foreign investments raised to the economy from the date of independence. It accounts for USD 9.6 billion in monetary terms.

Ukraine’s Economy and the Technocrat Elite

Ten years ago, it was received wisdom in western academic, business and policy circles that Ukraine was an archetypal “captured state” – a state owned and run almost entirely by a small, insecure and fabulously rich elite.

Of course, despite the cloak of academic respectability, the complaint from the West was not so much that the Ukrainian state was captured, but rather that it had been captured by the wrong people.

Russia May Cut Off Ukraine’s Gas Supply By Later Today

Russia has threatened to shut off its natural gas supply to Ukraine by 06:00 GMT on Monday, after last-minute talks in Kiev failed to resolve a long-running dispute over prices.

On Sunday night, a top official from Russia’s state gas firm Gazprom told AFP that the EU-brokered talks failed to bridge the two sides’ disagreements over price and that negotiators from Russia were already heading home.