Here comes trouble: Oct inflicted three severe blow to Kiev

© AP Photo / Efrem LukatskyПожилая the woman sells on the street in KievHere comes trouble: Oct inflicted three severe blow to Kiev© AP Photo / Efrem Lukatsky

A British consulting company IHS, Markit published a study about the economic stability of different countries. Russia was in the lead, ahead of the US and slightly behind China. But the neighbors of Ukraine in the rating of — developing African country. Kiev has sunk to the level of the Niger, Ethiopia and Sierra Leone and what will happen to the Ukrainian economy in the foreseeable future — in the material RIA Novosti.

Macroeconomic disaster

One of the main criteria by which IHS experts Markit evaluated the stability of the economy, — the dynamics of national currencies. But even though the hryvnia depreciated against the dollar by only 0.27% from the beginning of the year and the Argentinian peso by 49.5%, Kiev won in the overall ranking of eighth place, and Buenos Aires — twenty-fifth (the higher the place, the less stable the economy).

The fact is that, in addition to the fluctuations of national currencies, economists have considered such factors as the account balance, the volume of foreign exchange reserves, external debt, inflation and political risks. All this has undermined the stability of the hryvnia and all factors worse Ukraine were only seven States. And if you take into account only the emerging economies, the Kiev and is the leader of the rating.

But this is only the beginning. IHS experts Markit believe that next year the situation in Ukraine will worsen. This is largely due to the fact that the country will have to pay off the loans accumulated over the past four years. Only in 2019 Kiev will have to pay 6.5 billion. How to do it is a mystery, even the amount of new lending program from the International monetary Fund is only 60% of future payments.

This program deserves a separate discussion. It was discussed during the mission’s visit the lender in Kiev in mid-September. Then the Ukrainian mass media reported that it was about five or six billion dollars.

In fact, the IMF has allocated almost twice less and is not an assistance program, and the so-called short-term stand-by credit for 14 months. Such loans are granted if the borrower is unable to pay current debts.

New serious problem for the Ukrainian economy promises to be the decree of Vladimir Putin on sanctions against Ukraine in connection with its unfriendly actions, «contrary to international law».

In the decree itself does not specify what action it is, however, one can assume that this refers to the recent breakup of the Treaty of friendship between Russia and Ukraine as well as sanctions against the Russian physical and legal persons entered during the previous four years.

A specific list of responses will be the government. Prime Minister Dmitry Medvedev announced that Russian counter-sanctions will not affect «the Ukrainians as a whole», but will affect hundreds of individuals, «that their actions caused harm» the interests of Russia.

According to the head of the Duma Committee on financial market Anatoly Aksakov, the restrictions will be energy supplies, agricultural products and investment into the Ukrainian economy.

According to the FCS, in the second quarter of this year, total trade between Russia and Ukraine amounted to $ 3.7 billion with a surplus of 897 million dollars in favor of Russia.

The third blow fell on October the Ukrainian energy sector, and Kiev struck him themselves.

To get stand-by loan from the IMF, the authorities had to perform one of the main conditions of the lender to raise gas prices to the General market. Because of this, in October natural gas has risen by 23.5%.

«Now I do not include the heating and sit in the cold hut. What will I do? To survive we must somehow. Here we will try. I don’t know how», — said one of the Ukrainian TV channel «112 Ukraine».

It is worth noting that the Prime Minister Groysman said this, as his personal achievement — say, if not for the long talks and his «incredible effort», prices soared by 60%. However, under the deal with the IMF to raise them again next year.

In addition, in mid-October, Russia has stopped exports of gasoline, diesel and fuel oil to Belarus before the end of next year. Representatives of the Russian energy Ministry said that Belarus fully meets its own products, the processing of Russian oil, and purchased fuel reexporter to Ukraine.

According to the Ukrainian fuel market expert Leonid Kosyanchuk, while Kiev will not find alternative supplies of fuel from Belarus, the domestic market will decline both in volumes and prices.

The only way to fill this gap — to buy fuel in Europe, where prices are much higher than «Belarusian». This will be another blow to the wallets of ordinary Ukrainians.

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