Key developments and challenges

Stabilising the public finances is the key economic policy priority. If this objective is combined with much-needed improvements to the institutional environment and more efficient investments in infrastructure, it should help the economy to attain a more sustainable growth path.

The authorities have embarked on reforms to the gas sector to strengthen the sector’s security and sustainability. In addition to raising domestic gas prices to import parity levels, the state-owned energy company, Naftogaz, should be restructured and corporatised to strengthen its financial viability, support competition and help raise additional finance to modernise the gas transit system.

Now that the banking sector has achieved greater stability after the crisis, financial sector reforms should focus on further consolidation as well as improving the transparency of the sector, unwinding state participation in the nationalised banks and developing local capital markets.