President moves to increase import duties

On Friday Ukrainian President Viktor Yushchenko signed into law an increase in import duties by 13% on all goods except a category of critical imports (includes natural gas, oil products, etc). The measures were introduced to curb imports and protect Ukrainian producers. The increase in duties will be effective 10 days after publication in an official government newspaper, tentatively since March 5, for a 6-month period (subject to prolongation in 6-month periods by the Cabinet of Ministers). Proceeds from the higher duties will be directed into the government’s emergency stabilization fund. Andrii Parkhomenko: The legislation will positively impact the current account deficit, which we so far estimate at USD 1.3 bln (1.1% of GDP) in 2009, and may even turn it into a surplus. We will adjust our forecast to take into account the duty hike.