Insight

Ukraine in 2021: back to the old-new normal

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IMF , Political Stability , Ukraine

2021 will see Ukraine return to a variation on the pre-2019 norm: balancing between reform and vested interests. Persistent financing difficulties should produce enough pressure to see at least some reform progress. One year ago, Ukraine seemed ready to embark on a path of sustainable growth, demolishing the oligarchic structures that have throttled the country’s development since independence. But the reform drive has dissipated. Oligarchic power struggles crept back, forcing the sacking of a technocratic government in March and the leadership of the National Bank of Ukraine (NBU) in July, and in October, the Constitutional Court derailed much of the

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Sovereign credit risk soars in Ukraine

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Credit Risk , Sovereign Debt , Ukraine

The country is likely to avoid a default on existing obligations, but only if it keeps the IMF on board through continued commitment to reform. After a long recovery from the crisis of 2014-15, Ukraine’s macroeconomic stability has taken another large blow. Fiscal rollout in response to the coronavirus crisis, as well as a contraction in GDP that could come to anything between 5 and 10% in 2020, mean that the budget deficit will rise to at least 7% this year. This will be financed through borrowing, but a sharp rise in bond yields earlier this year means that doing

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Montenegro attracts significant Chinese investment

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Credit Risk , Sovereign Debt , Ukraine

Perks offered to China in return for investing in an ambitious highway project demonstrate the concessions Montenegro is willing to make to secure investment. The coronavirus crisis has heaped risks on the credit used to finance it, however. In recent years the Balkans have seen a massive increase in interest from China, under the umbrella of the worldwide Belt and Road Initiative. One of the region’s biggest examples of Chinese involvement is the ongoing project to build a highway from Bar, a port on Montenegro’s Adriatic coast, to Serbia’s capital city, Belgrade. Montenegro has attracted China to the project by

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Election of Volodymyr Zelensky as President of Ukraine

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Political Stability , Ukraine

In our first macro brief, we examine the implications of Volodymyr Zelensky’s landslide victory in Ukraine’s presidential election. We find that in the short term, markets will suffer from a stand-off between president and parliament, but a likely Zelensky win in the upcoming parliamentary elections holds out hope for a speedy recovery. Today we have published our first macro brief. These briefs will analyse political events, providing forecasts and insight from our team of expert analysts. The first brief examines the implications of Volodymyr Zelensky’s landslide victory in Ukraine’s presidential election. We predict that the coming months will be dominated

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