Ukraine: 2006 Article IV Consultation: Staff Report; Staff Statement; and Public Information Notice on the Executive Board Discussion

IMF Staff Country Reports, February 5, 2007

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Canonical URL: Ukraine: 2006 Article IV Consultation: Staff Report; Staff Statement; and Public Information Notice on the Executive Board Discussion

Fiscal policy in 2005–06 reshuffled resources from higher saving businesses to lower saving households, touching off a consumption boom.
The consumption boom was reinforced by rapid credit expansion.
In 2005, the domestic boom helped to offset the drag on the economy from:
- marked real currency appreciation,
- weaker steel exports owing to intensified third-country competition,
- higher business-tax collections,
- post-Orange-Revolution reforms, which clamped down on tax loopholes, smuggling, and corruption.
The authorities have proven adept at hitting low fiscal deficit targets.