MINISTRY OF ECONOMIC DEVELOPMENT AND TRADE OF UKRAINE

MINISTRY OF ECONOMIC DEVELOPMENT AND TRADE OF UKRAINE United Nations Development Programme in Ukraine (UNDP) GI Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine Scientific and Research Economic Institute (SREI) Institute of Economic Research and Policy Consulting The National Institute for Strategic Studies Ukraine: perspectives of the development Institute of Evolutionary Economics G. M. Dobrov Center for Studying R&D Potential and Science History CONSENSUS FORECAST Federation of employers of Ukraine Representative of the International Monetary Fund in Ukraine International Centre of Policy Studies CASE Ukraine Raiffeisen Bank Aval OTP Bank The Bleyzer Foundation Issue 31, 2012 FOREX CLUB 1

UKRAINE: PERSPECTIVES OF THE DEVELOPMENT (CONSENSUS FORECAST) is a publication by the Ministry of Economic Development and Trade of Ukraine (MEDT) prepared by the Department of macroeconomic forecasting with support of the United Nations Development Programme (UNDP) in the framework of the Acceleration of the Millennium Development Goals Ukraine Project (AMDGP). It will be useful to the government officials, experts of central and local executive authorities, academia, representatives of public organizations, and everyone interested in the matters of the country s socioeconomic development and macroeconomic forecasting. The publication contains materials presented during the seminar on macroeconomic forecasting held on 22 November 2012. Seminars on forecasting aim to improve the quality of macroeconomic forecasts by means of expert discussions (of forecasts, current economic tendencies, results of research), achieving the consensus concerning the prospective vision of further ways of the country s development, and exchange information among major forecasting organizations (governmental institutions, international financial organizations, scientific research institutes, analytical centres, nongovernmental organizations, etc.). The issue was prepared by: Natalya Horshkova Inna Mogilat Sergey Bokun Natalia Kovalenko Natalia Sitnikova Kateryna Kuritsyna Tetyana Bolila E-mail: bokun@me.gov.ua, natalia.sitnikova@undp.org. Contact phone numbers: (044) 253-93-29 Reference to sources of materials is mandatory Ministry of Economic Development and Trade of Ukraine 2

CONTENTS MAIN MACROECONOMIC INDICATORS FOR 2007-2011 4 DYNAMICS OF THE CONSENSUS FORECAST FOR 2010-2011 5 SHORT OVERVIEW OF CONSENSUS ASSUMPTIONS 7 FORECAST OF MACROECONOMIC INDICATORS FOR 2012-2013 9 FORECAST OF MACROECONOMIC INDICATORS FOR 2014-2015 (AVERAGE) RISKS FOR 2012-2013 23 TABLES 28 22 Consensus Forecast is an "averaged" value of the most important forecast economic development indicators of Ukraine calculated on the basis of expert estimates provided by participants of the Consensus Forecast survey. The consensus forecast for 2012-2013 presented in the publication has been calculated on the basis of materials provided by the experts of the Ministry of Economic Development and Trade of Ukraine, GI Institute of Economics and Forecasting of the National Academy of Sciences of Ukraine, Economic Research Institute, Institute of Economic Research and Policy Consulting, National Institute for Strategic Studies, Institute of Evolutionary Economics, G. M. Dobrov Center for Studying R&D Potential and Science History, Federation of employers of Ukraine, Representative of the International Monetary Fund in Ukraine, International Centre for Policy Studies, CASE Ukraine, Raiffeisen Bank Aval, OTP Bank, The Bleyzer Foundation and FOREX CLUB. The Consensus Forecast is based on the consultations and discussions with the experts. We would like to highlight that all the forecast indicators presented by the participants of the seminar are only independent expert estimates and not official forecasts of the relevant institutions. We express deep gratitude to all the experts who participated in the Consensus Forecast initiative. 3

MAIN MACROECONOMIC INDICATORS FOR 2007-2011 Table 1 Real sector, UAH mln Indicator 2007 2008 2009 2010 2011 Nominal GDP 720 731 948 056 913 345 1 082 569 1 316 600 Consumption 558 581 758 902 772 826 914 230 1 105 201 Investments 203 318 264 883 155 815 199 918 282 474 Net export of goods and non-factorial services -41 168-75 729-15 296-31 579-71 075 Index, year to year Actual GDP 107,9 102,3 85,2 104,1 105,2 Consumption 113,6 110,1 87,8 106,4 110,7 Gross accumulation of the fixed capital 123,9 98,8 49,5 103,9 110,1 Exports of goods and services 103,3 105,7 78,0 103,9 102,2 Imports of goods and services 121,5 117,0 61,1 111,3 116,8 Inflation, index Consumer price index (annual average) 112,8 125,2 115,9 109,4 108,0 Dec. versus Dec. of the previous year 116,6 122,3 112,3 109,1 104,6 Producer price index (annual average) 119,5 135,5 106,5 120,9 119,0 Dec. versus Dec. of the previous year 123,3 123,0 114,3 118,7 114,2 External sector, USD mln Current account -5 272-12 763-1 732-3 018-10 245 Exports of goods and services 64 001 85 612 54 253 69 255 88 844 Imports of goods and services 72 153 99 962 56 206 73 239 99 001 Foreign direct investments 9 218 9 903 4 654 5 759 7 015 External sector, USD mln Current account -3,7-7,1-1,5-2,2-6,2 Exports of goods and services 44,8 47,6 46,3 50,8 53,8 Imports of goods and services 50,6 55,6 47,9 53,7 59,9 Foreign direct investments 6,5 5,5 4,0 4,2 4,2 External sector, % year to year (nominal) Exports of goods and services 127,4 133,8 63,4 127,7 128,3 Imports of goods and services 135,4 138,5 56,2 130,3 135,2 Rate of exchange, UAH/USD Average 5,05 5,27 7,79 7,94 7,97 End of period 5,05 7,70 7,99 7,96 7,99 Consolidated budget, UAH mln All revenues 219 939 297 845 272 967 314 506 398 554 All expenditures (including lending) 227 610 312 028 310 225 379 191 421 612 Total balance -7 671-14 183-37 258-64 685-23 058 Privatisation 2 459 482 808 1 093 11 480 Consolidated budget, % of GDP All revenues 30,5 31,4 29,9 29,1 30,3 All expenditures (including lending) 31,6 32,9 34,0 35,0 32,0 Total balance -1,1-1,5-4,1-5,9-1,8 Privatisation 0,3 0,05 0,1 0,1 0,9 Money and credit Base money (as of the end of period), UAH mln 141 901 186 671 194 965 225 692 239 885 Dec. versus Dec. of the previous year, % 46,0 31,6 4,4 15,8 6,3 Money Supply (M3) (as of the end of period), UAH mln 396 156 515 727 487 298 597 872 685 515 Dec. versus Dec. of the previous year, % 51,7 30,2-5,5 22,7 14,7 Monthly average wage of workers, UAH 1 351 1 806 1 906 2 239 2 633 Nominal adjusted to the CPI, % to previous year 115,0 106,8 91,0 109,7 108,9 4

DYNAMICS OF THE CONSENSUS FORECAST FOR 2010 (April 2009 November 2010) Table 2 Real sector, UAH mln Показник 2010 report April 2009 (April 2009 / Report 2010) March 2010 (March 2010 / Report 2010) November 2010 (November 2010 / Report 2010) Nominal GDP 1 082 569 1 197 470 +10,6% 1 067 205-1,4% 1 078 984-0,3% Consumption 914 230 904 367-1,1% 866 861-5,2% 891 585-2,5% Investments 199 918 304 726 +52,4% 217 294 +8,7% 198 650-0,6% Net export of goods and non-factorial services -31 579-13 153 +18 426-12 469 +19 110-15 379 +16 200 Index, year to year Actual GDP 104,1 101,7-2,4 р.р. 103,4-0,7 р.р. 104,2 +0,1 р.р. Consumption 106,4 102,9-3,5 р.р. 101,9-4,5 р.р. 102,7-3,7 р.р. Investments 103,9 104,1 +0,2 р.р. 106,2 +2,3 р.р. 106,5 +2,6 р.р. Inflation, index Consumer price index (annual average) 109,4 114,6 +5,2 р.р. 111,6 +2,2 р.р. 109,7 +0,3 р.р. Dec. versus Dec. of the previous year 109,1 113,2 +4,1 р.р. 112,5 +3,4 р.р. 112,2 +3,1 р.р. Producer price index (annual average) 120,9 116,5-4,4 р.р. 114,2-6,7 р.р. 118,0-2,9 р.р. Dec. versus Dec. of the previous year 118,7 115,1-3,6 р.р. 114,0-4,7 р.р. 118,2-0,5 р.р. External sector, USD mln Current account -3 018-219 +2 799-562 +2 456-838 +2 180 Exports of goods and services 69 255 71 753 +3,6% 61 398-11,3% 67 027-3,2% Imports of goods and services 73 239 73 278 +0,1% 62 880-14,1% 68 767-6,1% Foreign direct investments 5 759 7 154 +1 395 5 354-405 4 668-1 091 External sector, % of GDP Current account -2,2-0,2 +2,0 р.р. -0,4 +1,8 р.р. -0,6 +1,6 р.р. Exports of goods and services 50,8 54,5 +3,7 р.р. 47,3-3,5 р.р. 49,3-1,5 р.р. Exports of goods and services 53,7 55,7 +2,0 р.р. 48,5-5,2 р.р. 50,6-3,1 р.р. Foreign direct investments 4,2 5,4 +1,2 р.р. 4,1-0,1 р.р. 3,4-0,8 р.р. External sector, % year to year (nominal) Exports of goods and services 127,7 111,6-16,1 р.р. 114,2-13,5 р.р. 121,8-5,9 р.р. Exports of goods and services 130,3 110,7-19,6 р.р. 111,9-18,4 р.р. 119,8-10,5 р.р. Rate of exchange, UAH/USD Average 7,94 9,10 +14,6% 8,23 +3,7% 7,93-0,1% End of period 7,96 9,43 +18,5% 8,16 +2,5% 7,97 +0,1% Consolidated budget, UAH mln All revenues 314 506 362 697 +15,3% 318 869 +1,4% 335 515 +6,7% All expenditures (including lending) 379 191 385 408 +1,6% 367 552-3,1% 393 091 +3,7% Total balance -64 685-21 798 +42 887-48 683 +16002-57 576 +7 109 Privatisation 1 093 4 300 +3 207 5 377 +4 284 3 338 +2 245 Consolidated budget, % of GDP All revenues 29,1 30,3 +1,2 р.р. 29,9 +0,8 р.р. 31,1 +2,0 р.р. All expenditures (including lending) 35 32,2-2,8 р.р. 34,4-0,6 р.р. 36,4 +1,4 р.р. Total balance -5,9-1,9 +7,8 р.р. -4,6 +1,3 р.р. -5,3 +0,6 р.р. Privatisation 0,1 0,4 +0,3 р.р. 0,5 +0,4 р.р. 0,3 +0,2 р.р. Money and credit Base money (as of the end of period), UAH mln 225 692 233 059 +3,3% 222 520-1,4% 224 845-0,4% Dec. versus Dec. of the previous year, % 15,8 14,8-1,0 р.р. 13,8-2,0 р.р. 15,8 0 Money Supply (M3) (as of the end of period), UAH mln 597 872 687 247 +14,9% 565 155-5,5% 584 587-2,2% Dec. versus Dec. of the previous year, % 22,7 20,3-2,4 р.р. 15,9-6,8 р.р. 19,8-2,9 р.р. Monthly average wage of workers, UAH 2 239 2 344 +4,7% 2 178-2,7% 2 286 +2,1% 5

DYNAMICS OF THE CONSENSUS FORECAST FOR 2011 (March 2010 November 2011) Table 3 Показник Real sector, UAH mln 2011 report March 2010 (March 2010 / Report 2011) March 2011 (March 2011 / Report 2011) November 2011 (November 2011 / Report 2011) Nominal GDP 1 316 600 1 244 736-5,5% 1 268 997-3,6% 1 294 550-1,7% Consumption 1 105 201 1 004 024-9,2% 1 050 248-5,0% 1 085 719-1,8% Investments 282 474 254 540-9,9% 257 366-8,9% 262 502-7,1% Net export of goods and non-factorial services -71 075-16 431 +54 644-36 431 +34 644-55 688 +15 387 Index, year to year Actual GDP 105,2 104,7-0,5 р.р. 104,6-0,6 р.р. 104,7-0,5 р.р. Consumption 110,7 104,5-6,2 р.р. 104,3-6,4 р.р. 107,1-3,6 р.р. Investments 110,1 109,3-0,8 р.р. 111,3 +1,2 р.р. 110,8 +0,7 р.р. Inflation, index Consumer price index (annual average) 108,0 110,6 +2,6 р.р. 110,3 +2,3 р.р. 109,2 +1,2 р.р. Dec. versus Dec. of the previous year 104,6 110,1 +5,5 р.р. 111,1 +6,5 р.р. 109,0 +4,4 р.р. Producer price index (annual average) 119,0 111,5-7,5 р.р. 116,3-2,7 р.р. 118,5-0,5 р.р. Dec. versus Dec. of the previous year 114,2 111,1-3,1 р.р. 116,5 +2,3 р.р. 119,6 +5,4 р.р. External sector, USD mln Current account -10 245-999 +9 246-3 650 +6595-6 305 +3940 Exports of goods and services 88 844 68 924-22,4% 80 627-9,3% 86 038-3,16% Imports of goods and services 99 001 70 942-28,3% 85 178-14% 93 112-5,95% Foreign direct investments 7 015 6 628-387 6 348-667 5 908-1107 External sector, % of GDP Current account -6,2-0,7 +5,5 р.р. -2,3 +3,9 р.р. -3,9 +2,3 р.р. Exports of goods and services 53,8 45,4-8,4 р.р. 50,5-3,3 р.р. 53,0-0,8 р.р. Exports of goods and services 59,9 46,8-13,1 р.р. 53,4-6,5 р.р. 57,4-2,5 р.р. Foreign direct investments 4,2 4,4 0,2 р.р. 4,0-0,2 р.р. 3,6-0,6 р.р.. External sector, % year to year (nominal) Exports of goods and services 128,3 111,9-16,4 р.р. 117,8-10,5 р.р. 126,4-1,9 р.р. Exports of goods and services 135,2 112,4-22,8 р.р. 117,9-17,3 р.р. 129,4-5,8 р.р.. Rate of exchange, UAH/USD Average 7,97 8,20 +2,9% 7,95-0,3% 7,98 +0,1% End of period 7,99 8,23 +3,0% 8,00 +0,1% 8,06 +0,9% Consolidated budget, UAH mln All revenues 398 554 377 835-5,2% 372 637-6,5% 393 352-1,3% All expenditures (including lending) 421 612 413 808-1,8% 419 387-0,5% 427 358 +1,4% Total balance -23 058-35 973-12 915-46 750-23 692-34 006-10 948 Privatisation 11 480 4 648-6 832 10 683-797 10 396-1 084 Consolidated budget, % of GDP All revenues 30,3 30,4 +0,1 р.р. 29,4-0,9 р.р. 30,4 +0,1 р.р. All expenditures (including lending) 32,0 33,2 +1,2 р.р. 33,0 +1 р.р. 33,0 +1 р.р. Total balance -1,8-2,9-1,1 р.р. -3,7-1,9 р.р. -2,6-0,8 р.р. Privatisation 0,9 0,4-0,5 р.р. 0,8-0,1 р.р. 0,8-0,1 р.р. Money and credit Base money (as of the end of period), UAH mln 239 885 225 126-6,2% 258 721 +7,9% 253 519 +5,7% Dec. versus Dec. of the previous year, % 6,3 14,6 +8,3 р.р. 14,3 +8,0 р.р. 11,4 +5,1 р.р. Money Supply (M3) (as of the end of period), UAH mln 685 515 575 552-16,0% 706 572 +3,1% 699 363 +2,0% Dec. versus Dec. of the previous year, % 14,7 17,0 +2,3 р.р. 18,5 +3,8 р.р. 16,8 +2,1 р.р. Monthly average wage of workers, UAH 2 633 2 248-14,6% 2 523-4,2% 2 651 +0,7% 6

SHORT OVERVIEW OF CONSENSUS ASSUMPTIONS Consensus assumptions of macroeconomic forecast The main consensus assumptions of the participants of the seminar are shown in Table 4. Table 4 GDP, % real change: March 2011 August 2011 November 2011 2012 2013: April 2012 August 2012 November 2012 World 4,1 4,1 3,4 3,0 3,1 2,9 4,1 3,4 3,2 Russian Federation 4,1 4,4 3,9 3,4 3,7 3,6 4,1 3,7 3,6 USA 2,7 2,7 2,0 1,8 1,9 1,9 2,7 2,0 1,9 China 7,9 8,2 Euro area/eu 1,7 1,7 1,1-0,3-0,3-0,1 1,7 0,9 0,5 Consumer Price Index, %, Dec to Dec: World 103,1 103,1 103,1 103,1 103,2 103,2 103,1 103,2 103,8 Russian Federation 107,3 107,4 106,7 106,2 105,8 106,0 107,3 106,4 106,3 USA 102,1 102,2 101,5 101,9 102,0 102,0 102,1 101,9 102,1 China 102,7 103,0 Euro area/eu 101,9 102,0 101,8 102,2 102,0 102,1 101,9 101,8 102,0 Exchange rate, ruble/usd 29,8 29,2 29,3 29,9 31,3 31,3 29,8 31,7 32,0 Exchange rate, euro/usd х х х 1,33 1,3 1,29 х 1,3 1,28 April 2012 August 2012 November 2012 Natural gas price, USD per 1 thousand cubic meters 292,9 365,6 386,8 400 423 425 292,9 436 425,5 Oil price, USD/barrel (annual average) 103,2 110,0 100,2 110 107,3 107,6 103,2 106,5 102,4 7

Change in tariffs (Dec to Dec), %: Natural gas х х х 9,8 15,9 5,0 х 37 29,0 Electricity х х х 18,9 15 5,0 х 31,9 19,0 Water supply (utilities) х х х 12,2 12,6 8,8 х 14 18,3 Drainage system (utilities) х х х 12,0 11,6 15,0 х 13 18,2 Maintenance of buildings and structures and surrounding areas (rent) х х х 10,5 14,1 11,1 х 15 16,2 Heating х х х 12,6 14,4 8,2 х 32,5 25,0 Passengers, baggage and freight turnover by rail Public telecommunications services connection х х х 13,1 14,7 8,7 х 20,5 14,3 х х х 8,2 10,4 3,1 х 15 15 Other assumptions NBU discount rate, %, as of the period end 7,8 7,8 7,4 7,5 7,5 7,5 7,8 7,3 7,4 Minimum wage, UAH (annual average) 1073,7 1100,0 1099,1 1109,6 1093,5 1099,6 1073,7 1213,0 1195,2 Budget revenue from privatization, million UAH 7263,5 8077,8 7692,9 9889 9685 9175,0 7263,5 9487,5 9637,5 Gross grain yield, million tons 44,7 46,4 45,9 45,9 43,9 44,2 44,7 48,4 47,0 8

FORECAST OF MACROECONOMIC INDICATORS FOR 2012-2013 We call your attention to the sixth version of the Consensus Forecast of the main macroindicators of Ukraine s economic and social development for 2012 and the third version of the Consensus Forecast of the main macro-indicators of Ukraine s economic and social development for 2013, calculated on the basis of materials provided by the attendees of the seminar (Tables. 9-13). 2012 year Figure 1. Consensus forecast of nominal and real GDP in 2012-2013 2013 year 9

2012 year Figure 2. Consensus forecast of price indices for 2012-2013 2013 year 10

2012 year Figure 3. Consensus forecast of main GDP components by end use category in 2012-2013 2013 year 11

2012 year Figure 4. Consensus forecast of private and government consumption and investments in 2012-2013 2013 year 12

2012 year Figure 5. Consensus forecast of average wage and people s real disposable income in 2012-2013 2013 year 13

2012 year Figure 6. Consensus forecast of growth in people s real disposable income and private consumption in 2012-2013 2013 year 14

2012 year Figure 7. Consensus forecast of banking indicators for 2012-2013 2013 year 15

2012 year Figure 8. Consensus forecast of net influx of foreign direct investments in 2012-2013 2013 year 16

2012 year Figure 9. Consensus forecast of volume of exports and imports of goods and services and average value of the negative current account balance in 2012-2013 2013 year 17

2012 year Figure 10. Consensus forecast of percentage of exports and imports of goods and services in the GDP structure and of the average value of negative current account balance in GDP in 2012-2013 2013 year 18

2012 year Figure 11. Consensus forecast of budgetary indicators in 2012-2013 2013 year 19

2012 year Figure 12. Consensus forecast of budgetary indicators as percentage of GDP in 2012-2013 2013 year 20

2012 year Figure 13. Consensus forecast of the monetary market indicators in 2012-2013 2013 year 21

FORECAST OF MACROECONOMIC INDICATORS FOR 2014-2015 (AVERAGED) A forecast of basic macroeconomic indicators for the period from 2014 through 2015 has been presented for the third time (Table 13). Retention of the major financial problems in Europe and renewal of the recession trends in certain EU countries reduces the variation of forecasts in the medium term and creates conservative estimates of economic growth in Ukraine in average in 2014-2015 years (fluctuations of 3% to 5%, consensus values 3.9%). Generally it is assumed that the main lever of economic growth is the expansion of investment demand: averaged value of the real growth of investment 5% rate with variation between of 2% to 9.3%, exceeding the average growth rate of real private consumption 4.6% with variation between of 3.3% to 5%. One of the factors forming the variation of forecast indicators given by experts for investment growth rate consists of stronger external risks of foreign companies curtailing investment plans or postponing implementation for the future period (averaged value of foreign direct investment is USD 7.8 billion variation of USD 6 billion to USD 9.1 billion) and keeping high intrinsic risk of low credit activity of the commercial banks. At the same time, according to the experts forecasts, general public administration expenditures will grow rather reservedly (the consensus estimate of the real growth rate of the state consumption is 2.1% with 2-2.3% variation). Thus giving consideration to the lessons learnt and implications of the Ukrainian economy s functioning under dynamic expansion of domestic consumer demand, analysts believe that in the medium-term perspective both the State and economic entities will pay greater attention to renewal of fixed assets, production upgrading, enhancement of scientific and technological potentials, and strengthening of competitiveness. As to the price situation, the experts mainly foresee keeping relatively low inflation rates for the medium term: averaged forecast indicators of consumer price index and producer price index (annual averages) are respectively 106.2% (105.1-107.2% variation) and 107.4% (105.4-110% variation). No consensus can be seen in medium-term forecast estimates of foreign trade development. In particular, current account balance estimates vary between minus 3.4% to minus 7.8% of GDP. The averaged value of goods and services export growth is 11.2% (7.6-17.4% variation), that for import being also 9.3% (6.7-15% variation). Accordingly, views on the medium-term currency exchange parameters are rather different. Forecasts for average annual exchange rate of hryvnia to US dollar for 2014-2015 vary within 8.5-8.8 UAH/USD (averaged value being UAH/USD 8.6). For the state budget-financed sector, the forecasters believe that budget spending will be greater than revenue in the medium term (averaged value of budget deficit is expected to be 1.2% of GDP for 2014-2015, maximal value being minus 1.4% of GDP). 22

Risks for 2012-2013 We offer you a consensus assessment of risks for 2012-2013. The experts assessed the risks by 2 criteria: probability of realisation of a specific risk and impact of the risk on the economy of Ukraine. The realisation of risks and their impact on the Ukrainian economy have been assessed according to the following scale: Probability of occurrence realization estimates considerable probability (50-60%%) of risk display 4; medium probability (30-49%%) of risk display 3; moderate probability (10-29%%) of risk display 2; small probability (under 10%) of risk display 1; the risk is not probable 0. 23 Estimates of the occurrence impact on the economy of Ukraine significant impact 4; moderate impact 3; small impact 2; insignificant impact 1; no impact 0. Based on the materials provided, an integral estimate of risks was calculated as a sum of occurrence probability estimates and occurrence impact on the economy of Ukraine weighed by the number of respondents. Risks for 2012 were estimated for the sixth time whereas risks for 2013 were estimated for the third time. The highest possible consensus estimate of foreign and domestic risks has the integral estimate 16. It is foreign risks that have appeared among leading ones in 2012: increasing the debt crisis in euro area (integral estimate is 11); failure to obtain planned financing from the IMF; deterioration of foreign economic conjuncture: recurrent landslide of prices at the world raw materials markets (integral estimate is 10), deficit of external funding and shrinkage of possibilities of access to the international capital markets; curtailing of investment plans by foreign companies or postponement of their realization terms for a future period (integral estimate is 9). At the same time, considering the Ukrainian economy s significant dependence on external factors, the latter s impact on the domestic market situation and pre-election year, expert estimates of domestic risks have grown. The highest integral estimate (13) among domestic risks has been given to: remaining low credit activity of commercial banks. Rather high position has been occupied by risks associated with significant growth in the state budget deficit and cash gaps of the Pension Fund, other state social insurance funds and Naftohaz Ukrainy NJSC; strengthening of devaluation tendencies at the monetary market (integral estimate is 12); delay in increase of tariffs for natural gas and public utilities (integral estimate is 11). At the same time, high integral estimate was given to: investors wait-and-see attitude during election campaign; large-scale capital outflow caused by lack of stability at foreign financial and raw material markets and reducing the volume of harvest in agriculture as a result of adverse weather conditions at the end of 2011-2012 (integral estimate is 9) that is, however, lower August s estimate (integral estimates were 11,10 and11). Among foreign risks for 2013, as for 2012, high integral estimate belongs to the risk of increasing the debt crisis in euro area (estimate 11 for 2012 and 10 for 2013) and deterioration of external economic conjuncture: recurrent landslide of prices at the world raw materials markets (10). At the same time, expert s estimate of the risk of failure to obtain planned financing from the IMF and curtailing of investment plans by foreign companies or postponement of their realization terms for future period decreased as of 2012 from 8 to 10 and 8 to 9 accordingly. At the same, increased the integral estimate of the risk of deficit of external funding and shrinkage of possibilities of access to the international capital markets from 9 in 2012 to 10 (conversely, in August s issue the integral estimate was decreasing).

The risk of significant growth in the state budget deficit and cash gaps of the Pension Fund, other state social insurance funds and Naftohaz Ukrainy NJSC and strengthening of devaluation tendencies at the monetary market has the greatest integral estimate among domestic risks for 2013 (integral estimate 13). Besides, the forecasters have high estimates (integral estimate 11) of such risks as remaining low credit activity of commercial bank, risks of «a new wave» of destabilization in the banking sector and substantial increase in tariffs for natural gas for households. Also has increased integral estimate of the risk of accumulation of the population s negative inflation expectations from 7 to 9 for 2012 and 8 as of August 2012 for 2013. So, among estimated domestic risks for 2013, risks in tariff policy, banking and budgetary sectors remain the most likely and influential. Table 5 Integral estimates of Foreign risks for 2012-2013 (as of November 2012) Foreign risks Integral estimate 2012 2013 Estimates of Probability Probability the occurrence estimates of Integral estimates of impact on the occurrence estimate occurrence economy of realization realization Ukraine Estimates of the occurrence impact on the economy of Ukraine Failure to obtain planned financing from the IMF 10 3 3 8 2 3 Deterioration of external economic conjuncture: recurrent landslide of prices at the world raw materials markets 10 3 3 10 3 3 Increasing the debt crisis in euro area 11 3 3 10 3 3 Strengthening of the military conflict in the Middle East 7 2 3 8 3 3 Deficit of external funding and shrinkage of possibilities of access to the international capital markets 9 3 3 10 3 3 Retention of the tendency of accelerated prices increase at the world energy markets 6 2 3 8 2 3 Slow growth of the USA economy 8 3 2 8 3 3 Euro devaluation and decrease of demand in the European Union 6 2 3 7 2 3 Curtailing of investment plans by foreign companies or postponement of their realization terms for future period 9 3 3 8 3 3 The probability of the countries leaving euro area 2 1 2 4 2 3 Table 6 Integral estimates of Domestic risks for 2012-2013 (as of November 2012) Domestic risks Integral estimate Probability estimates of occurrence realization 2012 2013 Estimates of Probability the occurrence Integral estimates of impact on estimate occurrence Ukraine`s realization economy Estimates of the occurrence impact on Ukraine`s economy Remaining low credit activity of commercial banks 13 4 3 11 3 3 Making economically groundless decisions on 8 3 3 3 1 2 24

Domestic risks sharp increase of social payments during electioneering Integral estimate 2012 2013 Estimates of Probability Probability the occurrence estimates of Integral estimates of impact on occurrence estimate occurrence Ukraine`s realization realization economy Estimates of the occurrence impact on Ukraine`s economy Investors wait-and-see attitude during election campaign 9 3 3 x x x Significant growth in the state budget deficit and cash gaps of the Pension Fund, other state social insurance funds and Naftohaz Ukrainy NJSC Large-scale capital outflow caused by lack of stability at foreign financial and raw material markets 12 3 3 13 3 3 9 3 3 9 3 3 Delay in increase of tariffs for natural gas and public utilities 11 4 3 6 2 3 Reducing the volume of harvest in agriculture as a result of adverse weather conditions at the end of 2011-2012 9 3 3 8 3 3 Strengthening of devaluation tendencies at the monetary market 12 4 3 13 4 3 Substantial increase of natural gas prices for municipal heat and power engineering enterprises 5 2 3 10 3 3 Substantial increase of natural gas tariffs for industry 5 2 3 9 3 3 Carrying out considerable emission to finance the budget deficit 6 2 3 7 2 3 Risks of «a new wave» of destabilization in the banking sector 7 2 3 9 3 3 Accumulation of the population s negative inflation expectations 7 3 3 9 3 3 Accumulation of VAT refund debt 8 3 3 9 3 3 Substantial increase of natural gas tariffs for the population 5 2 3 11 3 3 Expansion of the real economy s insolvency 8 2 3 8 2 3 Failure to conduct privatization of large entities 6 2 2 6 2 3 Increase of debt on payment for housing and public utilities 5 2 2 7 3 3 Growth of wage arrears 5 2 2 5 2 2 Deterioration of the labour market situation: reduction of the quantity of the employed and increase in the quantity of the unemployed 7 3 3 8 3 3 Increase of revaluation tendencies at the monetary market 2 1 2 2 1 2 25

Foreign risks Risks in March 2011 November 2012 March 2011 August 2011 Integral estimates of risks 2012 November April 2011 2012 August 2012 Table 7 Increasing the debt crisis in euro area х х 10 11 11 11 Failure to obtain planned financing from the IMF 7 6 8 12 10 10 Deterioration of foreign economic conjuncture: recurrent landslide of prices at the world raw material markets Deficit of foreign funding and shrinkage of possibilities of access to the international capital markets Curtailing of investment plans by foreign companies or postponement of their realization terms for a future period November 2012 7 8 12 11 11 10 9 9 11 11 12 9 7 6 9 7 10 9 Slow growth of the USA economy х х 8 7 8 8 Strengthening of the military conflict in the Middle East х х х 11 8 7 Retention of the tendency of accelerated prices increase at the world energy markets 9 8 7 9 7 6 Euro devaluation and decrease of demand in the European Union 5 5 9 7 9 6 The probability of the countries leaving euro area х х х х 5 2 Domestic risks Remaining low credit activity of commercial banks 9 6 9 12 13 13 Strengthening of devaluation tendencies at the monetary market 10 7 11 8 11 12 Significant growth in the state budget deficit and cash gaps of the Pension Fund, other state social insurance funds and Naftohaz Ukrainy NJSC 8 6 10 10 9 12 Delay in increase of tariffs for natural gas and public utilities 5 6 7 10 10 11 Investors wait-and-see attitude during election campaign х х х 11 11 9 Reducing the volume of harvest in agriculture as a result of adverse weather conditions at the end of 2011-2012 Large-scale capital outflow caused by lack of stability at foreign financial and raw material markets х х х 10 11 9 х х 9 10 10 9 Expansion of the real economy s insolvency 6 5 7 5 8 8 Making economically groundless decisions on sharp increase in social payments during electioneering 9 8 10 11 9 8 Accumulation of VAT refund debt 6 4 7 6 6 8 Risks of «a new wave» of destabilization in the banking sector 7 5 8 7 10 7 Accumulation of the population s negative inflation expectations 9 6 8 6 6 7 Deterioration of the labour market situation: reduction of the quantity of the employed and increase in the quantity of the unemployed 6 4 5 4 5 7 Failure to conduct privatization of large entities 4 3 5 5 4 6 Carrying out considerable emission to finance the budget deficit 8 5 7 7 8 6 Substantial increase of natural gas tariffs for industry 9 7 10 7 6 5 Substantial increase of natural gas prices for municipal heat and power engineering enterprises 9 7 9 7 5 5 Substantial increase of natural gas tariffs for the population 9 7 9 5 5 5 Growth of wage arrears 5 4 6 4 4 5 Growth of debt for utility services 6 6 8 4 4 5 Increase of revaluation tendencies at the monetary market 4 3 2 2 1 2 26

Risks in April 2012 November 2012 Table 8 Integral estimates of risks 2013 April 2012 August 2012 November 2012 External risks Deficit of foreign funding and shrinkage of possibilities of access to the international capital markets Deterioration of foreign economic conjuncture: recurrent landslide of prices at the world raw material markets 9 11 10 9 10 10 Increasing the debt crisis in euro area 9 8 10 Retention of the tendency of accelerated prices increase at the world energy markets 8 9 8 Failure to obtain planned financing from the IMF х 8 8 Curtailing of investment plans by foreign companies or postponement of their realization terms for a future period 7 8 8 Strengthening of the military conflict in the Middle East 9 8 8 Slow growth of the USA economy 6 8 8 Euro devaluation and decrease of demand in the European Union 7 8 7 The probability of the countries leaving euro area х 6 4 Domestic risks Strengthening of devaluation tendencies at the monetary market 12 11 13 Significant growth in the state budget deficit and cash gaps of the Pension Fund, other state social insurance funds and Naftohaz Ukrainy NJSC 8 9 13 Remaining low credit activity of commercial banks 11 10 11 Substantial increase of natural gas tariffs for the population 11 10 11 Substantial increase of natural gas prices for municipal heat and power engineering enterprises 10 9 10 Risks of «a new wave» of destabilization in the banking sector 7 10 9 Accumulation of the population s negative inflation expectations 7 8 9 Substantial increase of natural gas tariffs for industry 8 9 9 Large-scale capital outflow caused by lack of stability at foreign financial and raw material markets 9 8 9 Accumulation of VAT refund debt 6 6 9 Expansion of the real economy s insolvency 6 8 8 Deterioration of the labour market situation: reduction of the quantity of the employed and increase in the quantity of the unemployed 5 6 8 Growth of debt for utility services 5 7 7 Carrying out considerable emission to finance the budget deficit 7 7 7 Delay in increase of tariffs for natural gas and public utilities 4 5 6 Failure to conduct privatization of large entities 5 4 6 Growth of wage arrears 5 6 5 Increase of revaluation tendencies at the monetary market 1 2 2 27

Real sector Indicator Consensus forecasts for 2012-2013 (as of November 2012) 2012 2013 2012 2013 Table 9 Average MIN MAX MIN MAX UAH million Nominal GDP 1 422 682 1 567 777 1 347 300 1 464 638 1 365 500 1 661 888 Consumption 1 232 248 1 374 505 1 116 086 1 279 791 1 229 009 1 451 052 Private 970 506 1 085 086 930 200 1 010 062 1 029 686 1 158 271 Government 263 741 295 199 183 068 286 833 199 323 318 412 Gross investments 276 889 309 113 95 409 357 160 94 482 396 991 Gross accumulation of the fixed capital 279 323 308 681 253 039 310 183 251 145 352 461 Private 244 487 207 949 213 642 281 212 41 636 319 541 Government 38 919 42 210 28 971 46 500 32 920 48 600 Net export of goods and non-factorial services -101 689-101 273-134 800-82 209-140 335-58 300 Gross national savings 222 518 237 144 164 703 377 836 115 538 404 419 Index, year to year Real GDP 101,0 102,9 100,4 102,6 101,3 103,7 Consumption 106,6 103,5 102,9 109,0 100,2 105,6 Private 107,3 104,2 102,7 111,4 100,5 108,0 Government 102,7 101,0 100,8 109,2 97,9 104,4 Gross accumulation of the fixed capital 95,7 101,8 80,1 108,3 98,8 105,2 Exports of goods and services 97,8 101,8 94,3 102,1 96,0 103,1 Import of goods and services 102,9 103,3 100,4 106,3 96,8 106,2 Inflation Deflator of the GDP (annual average) 106,8 108,9 101,8 109,6 106,1 112,5 Consumer price index (annual average) 102,3 106,9 100,9 106,4 106,0 108,2 Dec. versus Dec. of the previous year 103,6 107,1 101,9 106,0 104,8 109,0 Producer price index (annual average) 105,8 109,1 103,7 109,8 105,0 116,7 Dec. versus Dec. of the previous year 106,1 108,4 102,7 109,2 105,5 115,5 index External sector USD million Current account -12 085-11 483-15 850-10 197-19 967-5 580 Exports of goods and services 90 353 97 584 76 500 95 175 69 600 100 550 Import of goods and services -103 775-109 959-106 428-87 700-114 091-77 000 Revenue balance -1 976-2 983-4 632-1 900-4 539-2 250 Official transfers (net value) 3 131 3 876 380 3 917 380 4 120 Capital account balance 9 823 10 269 6 700 11 842 1 610 15 606 Foreign direct investments 5 993 6 334 5 000 8 034 4 900 8 313 External sector as percentage of the GDP Current account -6,9-6,3-9,4-5,7-10,7-3,2 Exports of goods and services 51,5 53,2 43,4 58,0 37,7 60,0 28

Indicator 2012 2013 2012 2013 Average MIN MAX MIN MAX Import of goods and services -58,9-59,9-80,0-49,8-85,0-41,7 Revenue balance -1,1-1,6-11,0-0,4-7,0-1,2 Official transfers (net value) 1,8 2,1 0,2 7,0 0,2 8,0 Capital account balance 5,6 5,6 3,7 26,0 0,9 28,0 Foreign direct investments 3,4 3,5 2,8 17,0 2,6 17,0 External sector as percent, year to year (nominal) Exports of goods and services 102,2 107,5 97,2 105,6 102,6 112,8 Import of goods and services 105,3 106 101,0 108,7 95,9 112,9 Exchange rate, UAH / USD Average rate 8,08 8,55 8,00 8,20 8,30 9,00 End of period 8,41 8,81 8,20 8,80 8,35 9,5 Consolidated budget UAH million All revenues 439 075 494 811 429 269 455 641 466 182 514 144 All expenditures 474 645 521 803 462 857 482 148 494 122 534 993 Total balance -35 570-26 992-50 718-24 604-32 380-21 850 Privatisation 8 274 9 278 6 500 10 000 8 400 10 000 Consolidated budget % of GDP All revenues 30,9 31,6 30,0 32,0 29,4 32,1 All expenditures 33,4 33,3 32,5 33,7 31,4 33,4 Total balance -2,5-1,7-4,0-1,7-2,5-1,4 Privatisation 0,6 0,6 0,5 0,7 0,5 0,6 Money and credit Base money (as of the end of period), UAH mln 264 521 291 024 242 700 285 500 260 550 331 180 Dec. versus Dec. of the previous year, % 10,3 10,0 1,0 13,1 5,5 16,4 Money supply (M3) (as of the end of period), UAH mln 758 169 855 289 708 137 825 420 750 625 990 076 Dec. versus Dec. of the previous year, % 10,6 12,8 3,3 17,5 6,0 21,2 Weighted annual average rate on commercial banks credits in the national currency, %, as of the end of period 16,9 15,2 14,1 18,4 13,3 20,0 Gross NBU international reserve, USD mln 26 764 23 762 24 795 31 000 20 979 29 000 Social indicators Population, million persons 45,5 45,4 45,4 45,7 45,1 45,6 changes in % versus previous year 99,6 99,7 99,5 99,8 99,5 99,9 Monthly average wage of workers, UAH 3 040 3 384 2 997 3 100 3 200 3 570 Disposable income of population, UAH bln 1 108 1 220 1 055 1 200 1 161 1 260 Disposable income of population, changes in % versus previous year 9,6 4,8 6,5 12,0 3,6 6,1 29

Dynamics Of The Consensus Forecast For 2012 (March 2011 November 2012) Table 10 Indicator March 2011 August 2011 (August 2011 / March 2011) November 2011 (November 2011 / August 2011) April 2012 (April 2012 / November 2011) August 2012 (August 2012/ April 2012) November 2012 (November2012/ August 2012) Real sector, UAH mln. Nominal GDP 1 495 778 1 530 955 +2,4% 1 504 448-1,7% 1 479 807-1,6% 1 468 165-0,8% 1 422 682-3,1% Consumption 1 223 531 1 256 569 +2,7% 1 245 177-0,9% 1 233 219-1,0% 1 247 613 +1,2% 1 232 248-1,2% Investments 325 159 337 800 +3,9% 319 306-5,5% 329 075 +3,1% 307 523-6,5% 276 889-9,9% Net export of goods and non-factorial services -42 886-61 514-18 628-69 489-7 975-82 551-13 062-82 976-425 -101 689-18713 Indexс, year to year Real GDP 105,1 105,4 +0,3 р.р. 104,7-0,7 р.р. 103,2-1,5 р.р. 102,3-0,9 р.р. 101,0-1,3 р.р. Consumption 105,1 106,2 +1,1 р.р. 106,2 0 104,6-1,6 р.р. 105,6 +1 р.р. 106,6 +1,0 р.р. Gross accumulation of the fixed capital 110,2 109,8-0,4 р.р. 107,4-2,4 р.р. 104,2-3,2 р.р. 100,4-3,8 р.р. 95,7-4,7 р.р. Exports of goods and services х х х 104,3 х 103,9-0,4 р.р. 100-3,9 р.р. 97,8-2,2 р.р. Import of goods and services х х х 111,6 х 106,9-4,7 р.р. 102,9-4,0 р.р. 102,9 0 Inflation, index Consumer price index (annual average) 109,6 109,4-0,2 р.р. 108,9-0,5 р.р. 105,3-3,6 р.р. 103,3-2,0 р.р. 102,3-1,0 р.р. Dec. versus Dec. of the previous year 109,2 108,9-0,3 р.р. 108,6-0,3 р.р. 108,0-0,6 р.р. 105,8-2,2 р.р. 103,6-2,2 р.р. Producer price index (annual average) 113,2 113,7 +0,5 р.р. 113,0-0,7 р.р. 108,6-4,4 р.р. 107,9-0,7 р.р. 105,8-2,1 р.р. Dec. versus Dec. of the previous year 112,7 112,9 +0,2 р.р. 112,4-0,5 р.р. 110,5-1,9 р.р. 109,6-0,9 р.р. 106,1-3,5 р.р. External sector, USD million Current account -4 354-6 785-2 431-7 868-1 083-9 657-1 789-10 216-559 -12 085-1 869 Exports of goods and services 90 980 96 983 +6,6% 96 545-0,5% 95 492-1,1% 93 639-1,9% 90 535-3,31% Import of goods and services -96 386-104 979 +8,9% -105 392 +0,4% -105 498 +0,1% -104 445-1% -103 775-0,64% Foreign direct investments 6 510 6 632 +122 6 125-507 6 070-55 5 876-194 5 993 +117 External sector, % of the GDP Current account -2,34-3,6-1,3 р.р. -4,3-0,7 р.р. -5,3-1,0 р.р. -5,6-0,3 р.р. -6,9-1,3 р.р. Exports of goods and services 48,8 50,8 +2,0 р.р. 52,2 +1,4 р.р. 52,2 0 51,6-0,6 р.р. 51,5-0,1 р.р. 30

Indicator March 2011 August 2011 (August 2011 / March 2011) November 2011 (November 2011 / August 2011) April 2012 (April 2012 / November 2011) August 2012 (August 2012/ April 2012) November 2012 (November2012/ August 2012) Import of goods and services -51,7-55,0 +3,3 р.р. -57,0 +2,0 р.р. -57,7 +0,7 р.р. -57,6-0,1 р.р. -58,9-1,3 р.р. Foreign direct investments 3,5 3,5 0 3,3-0,2 р.р. 3,3 0 3,2-0,1 р.р. 3,4 +0,2 р.р. External sector, % year to year (nominal) Exports of goods and services 112,8 114,4 +1,6 р.р. 113,9-0,5 р.р. 110,1-3,8 р.р. 104,7-5,4 р.р. 102,2-2,5 р.р. Import of goods and services 113,0 115,5 +2,5 р.р. 115,1-0,4 р.р. 110,5-4,6 р.р. 105,7-4,8 р.р. 105,3-0,4 р.р. Exchange rate, UAH / USD Average rate 8,03 8,02-0,1% 8,14 +1,5% 8,10-0,5% 8,1 0 8,08-0,3% End of period 8,04 8,08 +0,5% 8,19 +1,3% 8,34 +1,8% 8,38 +0,5% 8,41 +0,4% Consolidated budget, UAH mln All revenues 434 066 451 139 +3,9% 446 041-1,1% 439 922-1,4% 448 642 +2% 439 075-2,1% All expenditures 470 510 492 579 +4,7% 468 012-5,0% 470 237 +0,5% 479 308 +1,9% 474 645-0,9% Total balance -36 444-41 440-4 996-21 971 +19 469-30 315-8 344-30 666-351 -35 570-4 904 Privatisation 7 392 9 231 +1 839 7 756-1 475 9 500 +1 744 9 429-71 8 274-1 155 Consolidated budget, % of the GDP All revenues 29,0 29,5 +0,5 р.р. 29,6 +0,1 р.р. 29,7 +0,1 р.р. 30,6 +0,9 р.р. 30,9 +0,3 р.р. All expenditures 31,5 32,2 +0,7 р.р. 31,1-1,1 р.р. 31,8 +0,7 р.р. 32,6 +0,8 р.р. 33,4 +0,8 р.р. Total balance -2,4-2,7-0,3 р.р. -1,5 +1,2 р.р. -2,0-0,5 р.р. -2,1-0,1 р.р. -2,5-0,4 р.р. Privatisation 0,5 0,6 +0,1 р.р. 0,5-0,1 р.р. 0,6 +0,1 р.р. 0,6 0 0,6 0 Money and credit Base money (as of the end of period), UAH mln. 292 104 283 139-3,1% 282 495-0,2% 266 850-5,5% 267 800 +0,4% 264 521-1,2% Dec. versus Dec. of the previous year, % 14,1 12,9-1,2 р.р. 10,9-2,0 р.р. 11,2 +0,3 р.р. 11,6 +0,4 р.р. 10,3-1,3 р.р. Money supply (M3) (as of the end of period), 837 415 821 927-1,8% 820 393-0,2% 748 349-8,8% 762 753 +1,9% 758 169-0,6% UAH mln Dec. versus Dec. of the previous year, % 18,4 17,2-1,2 р.р. 16,3-0,9 р.р. 9,2-7,1 р.р. 11,3 +2,1 р.р. 10,6-0,7 р.р. Monthly average wage of workers, UAH 2 853 3 117 +9,3% 3016-3,2% 2 991-0,8% 3 002 +0,4% 3 040 +1,3% 31

Real sector, UAH mln Indicator Dynamics Of The Consensus Forecast For 2012 (April 2011 November 2012) April 2012 August 2012 ( April 2012/ August 2012) November 2012 Таble11 (November2012/ August 2012) Nominal GDP 1 695 854 1 675 078-1,2% 1 567 777-6,4% Consumption 1 397 145 1 410 894 +1,0% 1 374 505-2,6% Investments 371 763 356 376-4,1% 309 113-13,3% Net export of goods and non-factorial services -79 377-94 095-14 718-101 273-7178% Gross national savings 285 480 285 523 +0,02% 237 144-16,9% Indexс, year to year Real GDP 104,1 103,6-0,5 р.р. 102,9-0,7 р.р. Consumption 104,7 104,2-0,5 р.р. 103,5-0,7 р.р. Gross accumulation of the fixed capital 105,6 104,7-0,9 р.р. 101,8-2,9 р.р. Exports of goods and services 104,6 104,8 +0,2 р.р. 101,8-3 р.р. Import of goods and services 105,7 106,1 +0,4 р.р. 103,3-2,8 р.р. Inflation, index Consumer price index (annual average) 108,0 107,6-0,4 р.р. 106,9-0,7 р.р. Dec. versus Dec. of the previous year 107,2 107,8 +0,6 р.р. 107,1-0,7 р.р. Producer price index (annual average) 110,8 110,1-0,7 р.р. 109,1-1,0 р.р. Dec. versus Dec. of the previous year 109,7 109,3-0,4 р.р. 108,4-0,9 р.р. External sector, USD million Current account -9 583-10 945-1 362-11 483-538,0 Exports of goods and services 105 003 102 509-2,4% 97 584-4,8% Import of goods and services -115 011-114 000-0,9% -109 959-3,5% Foreign direct investments 6 492 6 420-1,1% 6 334-1,3% External sector, % of GDP Current account -4,7-5,5-0,8 р.р. -6,3-0,8 р.р. Exports of goods and services 52,0 51,7-0,3 р.р. 53,2 +1,5 р.р. Import of goods and services -56,9-57,5-0,6 р.р. -59,9-2,4 р.р. Foreign direct investments 3,2 3,2 0 3,5 0,3 р.р. External sector, % year to year (nominal) Exports of goods and services 110,9 109,9-1 р.р. 107,5-2,4 р.р. Import of goods and services 109,9 109,5-0,4 р.р. 106,0-3,5 р.р. Exchange rate, UAH / USD Average rate 8,4 8,45 +0,6% 8,55 +1,18% End of period 8,7 8,63-0,8% 8,81 +2,09% Consolidated budget, UAH mln All revenues 502 826 513 327 +2,1% 494 811-3,6% All expenditures 530 224 537 394 +1,4% 521 803-2,9% Total balance -27 398-24 067 +3 331-26 992-2925 Privatisation 9 933 9 329-6,1% 9 278-0,6% Consolidated budget, % of GDP All revenues 29,7 30,6 +0,9 р.р. 31,6 1,0 р.р. All expenditures 31,3 32,1 +0,8 р.р. 33,3 1,2 р.р. Total balance -1,6-1,4 +0,2-1,7-0,3 р.р. Privatisation 0,6 0,6 0 0,6 0 Money and credit Base money (as of the end of period), UAH mln. 299 306 297 655-0,6% 291 024-2,23% Dec. versus Dec. of the previous year, % 12,2 11,1-1,1 р.р. 10,0-1,10 р.р. Money supply (M3) (as of the end of period), UAH mln 866 515 867 594 0,1% 855 289-1,4% Dec. versus Dec. of the previous year, % 15,8 14,9-0,9 р.р. 12,8-2,1 р.р. Monthly average wage of workers, UAH 3 386 3 367-0,6% 3 384 0,5% 32

Real sector, UAH mln of consensus forecasts for 2012 and 2013 (as of November 2012) Indicator Consensus forecast for 2012 as of November 2012 Consensus forecast for 2013 as of November 2012 Таble 12 (2013 / 2012) Nominal GDP 1 422 682 1 567 777 +10,2% Consumption 1 232 248 1 374 505 +11,5% Investments 276 889 309 113 +11,6% Net export of goods and non-factorial services -101 689-101 273 +416 Gross national savings 222 518 237 144 +6,6% Indexс, year to year Real GDP 101,0 102,9 +1,9 р.р. Consumption 106,6 103,5-3,1 р.р. Gross accumulation of the fixed capital 95,7 101,8 +6,1 р.р. Exports of goods and services 97,8 101,8 +4 р.р. Import of goods and services 102,9 103,3 +0,4 р.р. Inflation, index Consumer price index (annual average) 102,3 106,9 +4,6 р.р. Dec. versus Dec. of the previous year 103,6 107,1 +3,5 р.р. Producer price index (annual average) 105,8 109,1 +3,3 р.р. Dec. versus Dec. of the previous year 106,1 108,4 +2,3 р.р. External sector, USD million Current account -12 085-11 483 +602 Exports of goods and services 90 535 97 584 +7,8% Import of goods and services -103 775-109 959 +6,0% Foreign direct investments 5 993 6 334 +5,7% External sector, % of GDP Current account -6,9-6,3 +0,6 р.р. Exports of goods and services 51,5 53,2 +1,7 р.р. Import of goods and services -58,9-59,9-1 р.р. Foreign direct investments 3,4 3,5 +0,1 р.р. External sector, % year to year (nominal) Exports of goods and services 102,2 107,5 +5,3 р.р. Import of goods and services 105,3 106,0 +0,7 р.р. Exchange rate, UAH / USD Average rate 8,08 8,55 +5,8% End of period 8,41 8,81 +4,8% Consolidated budget, UAH mln All revenues 439 075 494 811 +12,7% All expenditures 474 645 521 803 +9,9% Total balance -35 570-26 992 +8578 Privatisation 8 274 9 278 12,1% Consolidated budget, % of GDP All revenues 30,9 31,6 +0,7 р.р. All expenditures 33,4 33,3-0,1 р.р. Total balance -2,5-1,7-0,8 р.р. Privatisation 0,6 0,6 0 Money and credit Base money (as of the end of period), UAH mln. 264 521 291 024 +10,0% Dec. versus Dec. of the previous year, % 10,3 10,0-0,3 р.р. Money supply (M3) (as of the end of period), UAH mln 758 169 855 289 +12,8% Dec. versus Dec. of the previous year, % 10,6 12,8 +2,2 р.р. Average wage of workers, UAH 3 040 3 384 +11,3% 33

Real sector Indicator Consensus forecasts for 2014-2015 (as of November 2012) 2014-2015 Average MIN MAX Таble 13 Nominal GDP, UAH mln 1 874 867 1 770 800 1 992 000 Actual GDP, index, year to year 103,9 103,0 105,0 Inflation Consumer price index (annual average) 106,2 105,1 107,2 Producer price index (annual average) 107,4 105,4 110,0 External sector USD mln Current account -11 407-16 420-7 046 Exports of goods and services 111 995 90 000 118 000 Imports of goods and services -123 820-130 000-98 800 Foreign direct investments -11 407-16 420-7 046 External sector % of GDP Current account -5,3-7,8-3,4 Exports of goods and services 51,6 42,3 59,0 Imports of goods and services -57,1-82,0-46,5 Foreign direct investments 3,6 2,8 16,0 External sector % year to year (nominal) Exports of goods and services 111,2 107,6 117,4 Imports of goods and services 109,3 106,7 115,0 Rate of exchange, UAH/USD Average 8,64 8,5 8,8 End of period 8,90 8,5 9,5 Consolidated budget % of GDP All revenues 30,5 28,5 31,0 All expenditures 31,7 29,5 32,4 Total balance -1,2-1,4-1,0 Privatisation х х х Money and credit Base money (as of the end of period), UAH mln 337 117 292 350 387 480 Dec. versus Dec. of the previous year, % 11,4 6,0 17,8 Money Supply (M3) (as of the end of period), UAH mln 1 009 612 910 444 1 217 793 Dec. versus Dec. of the previous year, % 13,9 10,0 24,1 NBU gross international reserves, USD mln 32 125 25 000 41 500 Social indicators Population, million persons 45,1 44,8 45,4 Monthly average wage of workers, UAH 3 826 3 400 4 300 34

Methodological explanations to Tables 2, 3, 9, 10, 11,12 and 13: The aggregated nominal values were calculated as a simple averaged value of the sum of the relevant indicators presented by all the forecasting organizations that participated in the Consensus Forecast survey. In order to equalize the averaged (consensus) figures of the aggregated nominal values with the sum of their components, the averaged values of structural indicators (such as, for example, consumption and investments) were calculated indirectly with the help of parts of these components in the aggregated value. For example, if an average weight of consumption in GDP is known, then a nominal value of consumption is equal to the sum of this weight and the value of the averaged consensus GDP calculated as a simple average. Indexes were calculated as a simple average of the sum of the relevant indicators presented by all the organizations. The average values of the indicators being forecasted as percentage of GDP (particularly, indicators of the external sector and budget) were calculated as a ratio of the averaged nominal value of the indicator to the relevant average GDP value. The indicators forecasted in US dollars were calculated as a percentage of GDP on the base of averaged annual exchange rate. Growth rates of the monetary aggregates within the forecast for 2012 (as of November 2012) were calculated as the ratio of the simple averaged nominal value from individual forecasted indicators presented by the participants to the actual value of the relevant indicator for 2011, and for 2013 as the ratio of the simple averaged nominal value from individual forecasted indicators presented by the participants to the relevant forecasted indicator for 2012. Average values of the current account balance were calculated as the sum of average values of the items of the account. Average values of budget deficit / surplus were calculated as a difference between the average values of revenues and expenditures. During preparation of the consensus forecast, the organizations attending the seminar provided the following materials: forecast assumptions regarding an economic policy to be pursued in 2012-2013, and some quantitative exogenous parameters of development (presented in Table 4); forecast of the main macroeconomic indicators for 2012 and 2013; additional text explanations given by some organizations regarding forecast assumptions; expert assessment of risks for 2012-2013 (presented in Table 5, 6, 7 and 8). 35