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Business news from the Ukrainian League of Industrialists and Entrepreneurs

DRAFT BUDGET RESOLUTION FOR 2016 SETS 2% GDP GROWTH, 9% INFLATION, UAH 22.5/$1 – CABINET

KYIV. April 10 (Interfax-Ukraine) – The Ukrainian government has submitted to the Verkhovna Rada the draft guidelines of the budget policy for 2016 (the budget resolution), built on the forecast for a GDP growth of 2% with inflation (December to December) being 9%, and the average annual hryvnia to U.S. dollar exchange rate of UAH 22.5 per $1.

According to the document, it is aimed at keeping the maximum amount of the national budget deficit within 3% of GDP and retaining a share of GDP redistribution through the consolidated budget at a level not higher than stipulated in the 2015 national budget.

The government noted that the draft document is based on the program of cooperation between Ukraine and the International Monetary Fund.

CURRENCY MARKET STABILIZING – NBU

KYIV. April 10 (Interfax-Ukraine) – The situation in the currency market is beginning to stabilize, the National Bank of Ukraine (NBU) has said on its website.

“Signs of reduction of tension were seen in the Ukrainian currency market in March. The quick regulatory measures made by the NBU and the start of the new four-year program of financial aid as part of the Extended Fund Facility (EFF) with the International Monetary Fund (IMF) promoted it,” reads the report.

The central bank said that on the cash currency market a net supply of foreign currency was observed for the second month in a row: citizens sold foreign currency $129.2 million more than they bought (net supply in February was $126.4 million).

The increase in the refinancing rate to 30% and rates on the active and passive transactions of the NBU helped it to retain the pace of money supply – the monetary base in March grew by 0.1%, the NBU said.

Among the NBU’s top-priorities is to achieve and maintain price stability in the country.

UKRAINIAN GRAIN HARVEST COULD BE 57.4 MLN TONNES, OILSEEDS HARVEST 15.1 MLN TONNES – EXPERT

KYIV. April 10 (Interfax-Ukraine) – The gross grain harvest in 2015 may be lower than last year’s harvest and could reach 57.36 million tonnes, Head of the Business Project Service at APK-Inform news agency Rodion Rybchinsky has said.

“The fields sowed with crops will almost remain unchanged… However we predict a fall in the yield for almost all crops,” he said at a press conference in Kyiv.

Rybchinsky added that according to his projections, fields with grain crops will total 14.825 million hectares compared to 14.8 million hectares in 2014. The average yield could fall from 43.7 centners per hectare to 39.7 centners per hectare.

The expert said that thanks to the good hibernation period the wheat harvest could be 23.6 million tonnes. The corn harvest could fall from 28.5 million tonnes to 24.3 million tonnes mainly due to the reduction of fields with corn.

He also said that the number of fields with soybeans will increase by 19%, to 2.15 million hectares, which would boost its harvest to 4.036 million tonnes. The expert said that sunflower harvest in 2015 could amount to 9.574 million tonnes, and rapeseeds harvest could amount to 1.491 million tonnes.

CONSUMER CONFIDENCE IN UKRAINE IMPROVES IN MARCH

KYIV. April 10 (Interfax-Ukraine) – Consumer confidence in Ukraine improved by 0.7 points, to 41.8 in March 2015, according to a study conducted by GfK Ukraine.

“In March 2015 the fall in consumer confidence of Ukrainians [which] continued for the past fours month [was] suspended. The Consumer Confidence Index (CCI) improved by 0.7 points, to 41.8,” reads the report on the study issued by the company.

The company said that the Index of Propensity to Consume lost 3.3 points, reaching 48.9.

Expectations of changes in unemployment improved: the Index of Expectations of Changes in Unemployment (IECU) rose by 6.1 points, to 163.3.

Inflationary expectations improved: the Index of Inflationary Expectations (IIE) lost 6.7 points, reaching 181. Devaluation expectations improved by 27.4 points, to 133.6.

“In the periods of the reduction of devaluation expectations consumer confidence mainly improved among rich citizens and residents of large cities. Along with measures aimed at reducing the deficit of the Pension Fund, confidence of respondents aged 60 or over worsened by 3 points,” reads the report.

CCI in Ukraine is calculated on the basis of a selective poll of households. During the study, 1,000 people aged from 16 upwards were polled.

GfK Ukraine is a Ukrainian research company. It is part of the GfK Group international market research network.

RADA ADOPTS LAW ON GAS MARKET

KYIV. April 10 (Interfax-Ukraine) – The Verkhovna Rada has adopted at second reading, and as a whole, law No. 2250 on the natural gas market. All in all, 290 deputies voted for the decision.

When considering the law, MPs confirmed the amendment, which prohibits the use of state gas pipelines by private operators under the terms of economic management (for free). At the same time, the lease or concession of gas distribution systems is not prohibited.

The main purpose of the law is the creation of an effective, competitive environment in the natural gas market, taking into account the basic requirements of EU legislation, including those under Directive 2009/73/EC of the European Parliament concerning common rules for the internal market of natural gas, and Regulation 715/2009 of the European Parliament on the conditions of access to natural gas transmission networks.

According to MP Ostap Semerak (People’s Front), the adoption of the law is one of the conditions for the approval of a $17.5 billion IMF loan for Ukraine under the new EFF program.

Earlier, Naftogaz Ukrainy board chairman Andriy Kobolev said that bringing Ukrainian gas legislation in line with European standards would increase the prospects of the country’s participation in the European Energy Union.

EU, NATO only recognizes 1991 Ukrainian borders, will never accept any violent changes – Komorowski

KYIV. April 9 (Interfax-Ukraine) – The EU and NATO will never recognize violent changes to Ukraine’s borders, Polish President Bronislaw Komorowski has said.

During his speech at the Ukrainian parliament, Komorowski said that the EU and NATO only recognize territorial integrity of Ukraine within the borders that were established in 1991, and any violent changes to them never be accepted.

Komorowski said that such attempts would be always condemned by Poland.

Moreover, Komorowski said that troops, armed vehicles and anti-aircraft installations of the Russian aggressor are present in eastern part Ukraine, adding that said that only blind people cannot see this.

He stressed that the western world can only feel safe when Ukraine is safe.