Ukrainian roulette

17 October 2008 By Martin Hutchinson

The country s economy is growing, and its payments deficit owes much to high foreign investment. But that s been derailed by the credit crunch and stable government is proving elusive, with Russia meddling. Still, there are enough positives to make an IMF effort worthwhile.

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The Ukrainian government has approached the International Monetary Fund to arrange a loan of up to $14bn to stabilize its financial system.

President Viktor Yushchenko on October 7 dissolved parliament for a snap election, the third in three years, to be held on December 7. The Kiev District Administrative Court annulled his decree on October 10, but the court was liquidated by Yushchenko on October 13.

According to a poll carried out in September, the proRussian Party of the Regions had 23% support, the Yulia Tymoshenko Bloc garnered 19%, and Yushchenko's Our Ukraine party only 5%. The remaining 53% either supported smaller parties, were undecided or intended to refrain from voting. A 50% voter turnout is required for a snap election, outside the regular fouryear schedule, to be valid.

The IMF forecasts 5.5% growth for Ukraine in 2008 and 4.2% growth in 2009. Inflation is expected to be 22% in 2008 and 16% in 2009. The current account deficit is forecast at $14bn (7.6% of gross domestic product) in 2008 and $22bn in 2009.

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