Ukraine Economic Outlook

     After over two-years of contraction, Ukraine’s economy returned to growth in Q1, although the pace of expansion was meagre and driven mainly by base effects. Fewer military clashes and more stable price pressures have helped lead to a stabilization in economic data. The modest recovery path seems to have continued in Q2, with industrial production recording the fourth consecutive expansion in May. In the political arena, the Parliament approved a key judicial reform bill, the first major reform since the new government took office in April. The vote unlocked the third USD 1.0 billion loan from the United States and paves the way for a disbursement of IMF funds in July. Following the approval of the bill, S&P Global Ratings affirmed Ukraine’s B- rating and stable outlook as it is confident that the country will continue implementing structural reforms.