Leading Economic Indicator: Rapid economic growth will continue in Q3’07

Over Q1’07, the Leading Economic Indicator, which is calculated by ICPS to evaluate short-term economic development trends in Ukraine, continued to grow rapidly. This kind of acceleration is evidence of a foundation for maintaining a rapid pace of economic growth during Summer 2007

In Q1’07, the Leading Economic Indicator continued to grow rapidly. Annual growth of the Indicator was 22.03 in March 2007, against 20.69 in February 2007. This is noticeably above the minimum value for 2006, 19.87, which was registered in December.

In March 2007, all LEI components made a positive contribution to its growth, except for the rates for hryvnia term deposits. The main factors behind the LEI’s growth are the favorable situation on world steel markets, low inflation and active borrowing.

The upswing in the LEI in Q1’07 is the evidence of powerful positive factors for the country’s economic development in Q3’07. Retrospective analysis of this Indicator shows that the insignificant slowdown in economic growth over Q1’07 was determined by a downward trend in two monetary components, long-term loans and rates for deposits, in H2’06.

The Leading Economic Indicator system is one contemporary instrument for making short-term forecasts for a country’s economic development. The indicator that ICPS economists have developed should make it easier to assess the prospects for short-term economic development in Ukraine.

For additional information, contact Oleksandr Zholud.