http://www.me.gov.ua/control/en/publish/printable_article?art_id=42763

 

Factors of national stability

 

Review of Ukrainian economy development in the first quarter of 2009

 

Record-high rates of Ukraine’s economy development in 2003 have been fixed in the first quarter of 2004 reflected in high positive GDP and industrial output dynamics. Actual GDP increased by 10.2% over the first two months of 2004 while the accretion over the corresponding period of the last year amounted to 7.2%. The largest build-up of gross added value was observed in construction industry (+27.0%) and processing industry (+22.4%). In general volumes of industrial output in the first quarter augmented by 18.8% that considerably exceeds the index of the last year (+10.7%). Machine building kept developing with much faster rates than industry as a whole.

Acceleration of above mentioned industries’ growth was promoted by “investment boom” occurred in 2003. Investments to fixed assets increased by 32.5% over nine months of 2003, while the volume of direct foreign investments expanded by 21.7% over the year. More than 40% of investments to fixed assets herewith were put into development of industrial companies, in particular, to the enterprises of processing industry. Expenses to purchase machines and equipment and reconstruction of existing enterprises amounted to over half of investments.

Due to recovery of business and expansion of external and domestic demand this year foreign trade in goods has significantly revived. Export of goods increased by 44.4% over January – February 2004 if compared with the same period of 2003. Import herewith augmented by 37.2%. Balance of trade in commodities constituted USD 611.3 mn. Official rate of Ukrainian currency to US dollars practically did not change over this time, while Ukrainian Hryvnya has slightly appreciated if exchanged into Euro.

Prices on consumer market grow in slower rate than last year. In particular, consumer price index made 102.2% in the 1^st quarter 2004 (to compare, 103.7% in the 1^st quarter of 2003). It was mainly reasoned by reduction of price rates for foodstuffs. Meanwhile price index of industrial output manufacturers exceeded the figure of the last year making 106.8%.

Dynamics of monetary indicators was quite restrained as well. Monetary base expanded by 3.4% up to UAH 41.4 bn since the beginning of the year, monetary stock enlarged by 6.4% up to UAH 101.1 bn, while cash outside banks amounted to UAH 33.6 bn having augmented by 1.4%.

Credit injections of banks to the economy of Ukraine increased by 8.2% making UAH 73.4 bn by April 1, 2004. At the same time, average credit interest rate in national currency diminished by 0.5% over the first quarter of 2004 down to 17.2%.

Fiscal policy of the state this year is directed at both sustaining of macroeconomic stability to fix stable high rates of economy growth and top-priority security of population social needs. Due to reduction of income tax since beginning of 2004 down to 13%, its share in structure of budget revenues declined to 16.4% over January – February 2004 (compared to 17.8% in 2003). Real revenues of consolidated budget grew by 2.9% over this period of time and income of state budget enlarged by 1.2%. Proficite made 4.7% and 2.1% of the GDP of correspondingly consolidated and state budget. Existing resources of state budget were directed first of all to payment of wages, money support, pensions, scholarships, and other social payments.

The fact that actual salary over January – February 2004 increased by 25% and actual income of population that can be used for purchasing of consumer goods and payment of services augmented by 10.4% evidence gradual growth of population wealth. However augmentation of labor resources cost has led to growth of registered unemployment rate by 0.2% since the beginning of the year. Unemployment rate reached 3.8% of able-bodied population in productive age by March 1, 2004.

Still increase of population incomes was one of the factors of domestic demand expansion. It allows to forecast keeping of stable high indices of economic growth till the end of 2004 provided last year positive tendency of investment activity increase would be maintained.

 

According to the information of Ministry of economy and on European integration of Ukraine