EAVEX Weekly

May 21, 2018

Kyiv-listed stocks demonstrated a moderate rise last week, with a report that the country’s economy grew by 3.1% YoY in 1Q18 spurring some buying activity. On the other hand, investors remain unconvinced about Ukraine’s ability to deliver really strong GDP growth, as painful structural reform implementation is slowing down amid flourish of populist messages from key politicians. The resurgence of former Prime Minister Yulia Tymoshenko, who is one of the champions of Ukrainian populism, is considered as quite a worrying sign ahead of next year’s presidential election. Tymoshenko and other nominally pro-Western populist politicians often employ anti-Western and anti-IMF rhetoric when arguing for economic nationalism. We believe that without direct Western support it would be difficult for Ukraine to solve the country’s historical current account deficit which needs to be compensated by investments and borrowings from abroad.