Year 2016 in Ukraine became a year of starting on the economic recovery path. Real GDP growth in 2016 is estimated at 1.4%. It was supported by higher domestic demand. In particular, real private final consumption increased due to higher disposable income primarily attributed to increase in wage income.
In 2015, the USAID Leadership in Economic Governance (LEV) Program conducted a large-scale survey of small and medium enterprises (Annual Business Climate Assessment in Ukraine). One of the features of this survey is that entrepreneurs themselves identify obstacles to doing business and reforms they expect from the state.
We believe that if the state ceases to intervene in the pricing mechanisms, the profitability of enterprises will improve, investments will increase and administrative burden on business will be reduced. On the other hand, there are certain risks that were the reason why the government abolished this regulation in the form of experiment.
In late 2015 – early 2016, when the ABCA survey was conducted, Ukrainian small and medium businesses mostly assessed business climate in the country as neutral or negative. Only 6% of the polled SMEs believed that business climate was favorable.
The Association Agreement (AA) between the EU and Ukraine is a complex document covering a wide range of issues from justice to energy, from free trade to sports. Therefore, its impact on the Ukrainian economy will also be multifaceted. For business, the AA means new opportunities, both domestic and abroad.
Two years have passed since Euromaidan won in Ukraine. We try to look at what changed over the last two years. We discuss macroeconomic situation, fiscal issues, financial sector, and trade. We also outline major reforms conducted over this period and outline shortly future reforms agenda.
Ukrainian exporters say that inefficient and non-transparent VAT refunds system and high levels of bureaucracy are the biggest obstacles for export. The survey also reveals that smaller enterprises tend to be more burdened by complicated customs procedures and lack of transparency in the operation of tax agencies.
It might sound unrealistic with Eurosceptic populism on the rise but the only way to tackle lack of Union’s efficiency, both internally and externally, is to introduce more integration and coordination. In today’s globalised world, aiming for dissolution or weakening the Union is a key geopolitical threat to stability on the continent.
During the past few weeks nothing really new occurred in cryptocurrency’s world. The last two weeks, however, have already brought a change. The discussion related to Mike Hearns’s exit about the future of Bitcoin lead by important developers from the community is contributing to this change.
The fiscal position of the Government remains comparatively strong. The Government is expected to continue reforms implementation, which would also result in additional support by official international donors. Overall, real GDP is expected to grow by 1.7% in 2016.
