I've seen a lot of data on Ukraine's macroeconomic situation recently, so I think I'll summarize some of the major articles here.

Economist Intelligence Unit - Country Outlook - July 2005
EIU, in their crotchety old economist kind of way, has predicted 6% GDP growth in 2005 and less than 6% in 2006. (I and many investors would be more optimistic about next year) To the Economist, the biggest problem will be the worldwide fall in steel prices (up to 30% forecasted).

They are more ambiguous about the fall in oil prices. It will hurt Ukraine because it will hurt Russia and Russia is a big importer of Ukrainian goods. It will help Ukraine in that Ukraine will pay less for oil itself.

Sigma-Bleyzer July 2005 Report, Sigma-Bleyzer June 2005 Report
In their two reports, the Sigma-Bleyzer people say the 6-7% GDP growth forecasted by foreign organizations and analysts looks more realistic than the government's July forecast for growth of 8% of GDP.

On the positive side:

1. Hryvnya appreciation: The SigmaB folks liked the moderating effects of the Hryvnya appreciation back in the spring (they've always liked it) though I (and lots of other people) mentioned at the time that it would have been nice if the YuGov people had given people some warning.
   
2. Potentially large privatization revenues: They were hopeful about possible increases in privatization revenues (a ban on sales of government assets was lifted in June and the resumption of privatization was legally set in motion in July)

On the negative side:

1. Declining Exports: SigmaB blamed the decline in the metallurgic industry for reduced growth in demand for Ukrainian exports (just like the EIU).
   
2. Skyrocketing Imports: Simultaneously, they said that imports were going way up due to increased social spending in the spring which has lead to greatly increased consumer purchasing. Tax enforcement and administration has improved, but they think it's going to have to improve a lot more to keep up with the crazed social spending that just keeps going up in the run up to the March 2006 election.

Ukraine Hastens to Open Markets by Roman Bryl with ISI
This article is loaded with numbers on the new customs code adopted in late June. Mr. Bryl starts out by saying this is the most liberal custom's code in Ukraine's history. Duties were reduced on 56% of goods subject to customs duties (the biggest exceptions were agriculture and metallurgy: agriculture looms large in the minds of Ukrainians and thus lobbyists and populists, like Tymoshenko, keep it protected; metallurgy is a huge source of budget revenues)

The average import duty fell from 7.79% to 4.45%. This fall, along with moves to make the system less complex, should do no ends of good for the economy: the complex classification of different goods with different customs duties lead to lots of classification games while sapping government administrative resources. In addition, the size of the tariffs lead to high smuggling rates.

Considering all this good data, I was perplexed by Bryl's assertions that "Parliament supports WTO accession" and that movement towards WTO accession should be more gradual because it has yet to be proven worthwhile. Though he could not have known about the fight to come in July, it would take a pretty poor misreading to assume the Socialists were entirely on board with the idea. Since NU is short on votes without them, I don't see how Mr. Bryl justified this assertion. As for the WTO, why be gradual? When has it ever failed to be worthwhile for a country? Name one case for me, please!

Prospects for Economic Development in Ukraine by Prof. Bohdan Hawrylyshyn
This article seemed by far the weakest in terms of statistics to back up the claims it makes. In addition, it generally just repeated things that any businessman in Ukraine would say: everything will be fine if taxes are lower, tax rules are better, and corruption goes away.

IMF Working Paper on Credit Booms in Transitional Economies - June 2005
This paper covers Bulgaria, Romania, and Ukraine. The writers assess Bulgaria and Romania as having similar problems to face in ensuring that the growth of credit does not get out of hand, but that Ukraine has its own problems.

Ukraine, in their opinion, is pretty strong in terms of the actual inflation levels, credit requirements, and other macroeconomic factors. In Ukraine, the cause for concern is in what they call "prudential" issues. What they refer to with this term are the following problems:

1. The system is not transparent enough
2. There are too many banks, most of which are local Ukrainian ones without a foreign presence.
   
3. Too many loans are made by the banks to individuals associated with those banks as friends or relatives or other ties of that nature

FDI Environment in Ukraine (FDI Magazine) - June 2005
I would suggest reading this article. It was written by Jim Hydzik, my former boss at Eastern Economist, and I'm impressed by the quotes he got from an embassy investment advisor and European Business Association VP.

The article mentions how the YuGov failed to warn businesspeople ahead of time that it would be making radical changes to the laws governing Special Economic Zones and Priority Development Areas. This has been a key problem for the YuGov since the beginning. Both folks also mentioned that WTO accession will be critical to improving the investment climate.

But my favorite quote is about what will ultimately be the most important long term factor:

One of the biggest differences between this government and the prior administration is that this one is willing to listen. Within two weeks of Mr Yushchenko’s coming to power, the vice-premier, Oleg Rybachuk, started a dialogue with us concerning changes that need to be made. [said the EBA VP]