February 2008

In order to make the conclusions about what our country has achieved for the last year let's face some statistics.

Ukraine has reached a significant macroeconomic outcome in 2007 despite a 45% price hike in imported gas, political uncertainties and changes in world steel prices. According to first data the Ukrainian economy increased by 10% in these terms.

Good GDP increasing, more moderate increases in recurrent expenditures and improvements in the collection of budget revenues allowed the government to maintain a low consolidated fiscal deficit at 1% of GDP.

Consumer prices increased by 12.6% in 2007, directed by energy-price pass-through.

2007 was another so called "credit boom" year with as credits to the real sector and households surged 71%..

The merchandise trading deficit widened to $5 bln or about 5% of estimated full-year GDP; hence, the current account is estimated to be around 1% of GDP.

According to obtained data of the Ukrainian State Statistics Committee (SSC), Ukraine`s GDP grew by 10% in 2007, considerably exceeding the 2.5% growth forecasted at the beginning of the year. Hence the nominal value of GDP for 2007was not released, GDP is calculated at UAH 527.3 billion ($104.4 billion).

The greatly expected GDP growth was supported by the continuing consumption boom, recovered investment activity and improved export performance.

Consumption was the main contributor to economic boom. During the first nine months of the year, private consumption advanced by a record high 20%, underpinned by robust growth of real household disposable benefit and successive credit conditions.

Some slowing down in the last quarter of the year reflected decelerating real household disposable income and energy price pass-through on services tariffs. The slowdown in real household income was the result of slower real wage growth and social security payments. Although decelerating, real household income grew by 17%.