Seb Country Analysis Oct 2009 Ukraine

Ukraine SEB MERCHANT BANKING – COUNTRY RISK ANALYSIS

October 27, 2008

Analyst: Jenny Nordgren. Tel: +46 8 763 96 05. E-mail : [email protected]

Political chaos, rapidly growing macroeconomic imbalances and the recent sharp slowdown in the economy risk triggering a currency crises and further financial instability. However, hopes are that the planned IMF loan of USD 16.5 billion will restore confidence and economic and financial stability.

Country Risk Analysis

Index

= aÉÉéÉåáåÖ=éçäáíáÅ~ä=ÅêáëáëK=lå=lÅíçÄÉê=UI=mêÉëáÇÉåí=vìëÅÜÉåâç=ÇáëëçäîÉÇ=íÜÉ= m~êäá~ãÉåí=~åÇ=Å~ääÉÇ=Ñçê=åÉï=ÉäÉÅíáçåë=éä~ååÉÇ=íç=ÄÉ=ÜÉäÇ=çå=aÉÅÉãÄÉê=NQ=J=íÜÉ= íÜáêÇ=é~êäá~ãÉåí~êó=ÉäÉÅíáçå=áå=~ë=ã~åó=óÉ~êëK=qÜÉ=ãçîÉ=ÑçääçïÉÇ=íÜÉ=Åçää~éëÉ=çÑ=íÜÉ= ÑçêãÉê=êìäáåÖ=Åç~äáíáçå=çå=pÉéíÉãÄÉê=PI=OMMU=êÉëìäíáåÖ=Ñêçã=~=ïçêëÉåáåÖ=ëéäáí= ÄÉíïÉÉå=râê~áåÉÛë=íïç=íçé=äÉ~ÇÉêëI=mêÉëáÇÉåí=vìëÜÅÜÉåâç=~åÇ=mêáãÉ=jáåáëíÉê=vìäá~= qóãçëÜÉåâçI=ÑçêãÉê=lê~åÖÉ=oÉîçäìíáçå=~ääáÉë=ïÜç=Ü~îÉ=ÄÉÅçãÉ=ÄáííÉê=êáî~äë=ïáíÜ= ÇáÑÑÉêáåÖ=îáëáçåë=çÑ=Üçï=râê~áåÉ=ëÜçìäÇ=Ü~åÇäÉ=êÉä~íáçåë=ïáíÜ=oìëëá~=~åÇ=tÉëíK= qóãçëÜÉåâç=Ó=íÜÉ=ÑçêãÉê=Ñêçåí=ÑáÖìêÉ=çÑ=íÜÉ=lê~åÖÉ=êÉîçäìíáçå=Ó=Ü~ë=êÉÅÉåíäó=íìêåÉÇ= íç=íÜÉ=b~ëí=~ë=áåÇáÅ~íÉÇ=Äó=ÜÉê=åÉìíê~ä=ëí~åÅÉ=çå=oìëëá~=áå=íÜÉ=ï~ê=ïáíÜ=dÉçêÖá~K=qÜáë= Ü~ë=ê~áëÉÇ=ëçãÉ=áëëìÉë=ÅçåÅÉêåáåÖ=ÜÉê=éçäáíáÅ~ä=ëí~åÅÉ=~åÇ=ÜÉê=éçëáíáçåáåÖ=~ÜÉ~Ç=çÑ= íÜÉ=ìéÅçãáåÖ=éêÉëáÇÉåíá~ä=ÉäÉÅíáçå=áå=É~êäó=OMNMK=kÉîÉêíÜÉäÉëëI=oìëëá~=áë=~å= áãéçêí~åí=ëíê~íÉÖáÅ=é~êíåÉê=Ñçê=râê~áåÉI=ÉëéÉÅá~ääó=áå=îáÉï=çÑ=íÜÉ=ÑçêíÜÅçãáåÖ= åÉÖçíá~íáçåë=çÑ=åÉñí=óÉ~êÛë=Ö~ë=éêáÅÉëI=~åÇ=ÜÉê=íìêå~êçìåÇ=ÅçìäÇ=éêçÄ~Ääó=é~êíäó=ÄÉ= Éñéä~áåÉÇ=Äó= Industrial Production ÉÅçåçãáÅ= 120 ÅçåëáÇÉê~íáçåëK= 115 Overall `ìêêÉåí=éçäáíáÅ~ä= ÅÜ~çë=êáëâ= 110 ÅçãéäáÅ~íáåÖ=~åÇ= 105 ÇÉä~óáåÖ=íÜÉ= êÉÅÉåíäó=~ååçìåÅÉÇ= 100 fjcJéêçÖê~ã= 95 áåÅäìÇáåÖ=~=rpa= NSKR=Äáääáçå=äç~å= 90 Basic Metals and ëáåÅÉ=áí=êÉèìáêÉë= 85 Fabricated Metal Products áãéäÉãÉåí~íáçå=çÑ=~= 80 ÅçãéêÉÜÉåëáîÉ= Jan Apr Jul Oct Jan Apr Jul éçäáÅó=é~Åâ~ÖÉI= 07 08 áåÅäìÇáåÖ=íÜÉ= ~Ççéíáçå=çÑ=ÉãÉêÖÉåÅó=äÉÖáëä~íáçå=ëìééçêíáåÖ=íÜÉ=Ä~åâáåÖ=ëóëíÉãK= = mäìããÉíáåÖ=ÉÅçåçãáÅ=~ÅíáîáíóK=^ÑíÉê=ã~åó=óÉ~êë=çÑ=ëíêçåÖ=éÉêÑçêã~åÅÉ=ëìééçêíÉÇ= Äó=ëíêçåÖ=ÇçãÉëíáÅ=ÇÉã~åÇ=~åÇ=ÜáÖÜ=Éñéçêí=éêáÅÉëI=ÉÅçåçãáÅ=~Åíáîáíó=áë=åçï=áå=~= ëíÉÉé=ÇÉÅäáåÉI=ÇêáîÉå=áå=é~êí=Äó=ëÜ~êé=Ñ~ää=áå=ÖäçÄ~ä=ëíÉÉä=éêáÅÉë=ÜìêíáåÖ=íÜÉ=ãÉí~ä= Source: Reuters EcoW in

important your attention is drawn to the statement on the back cover of this report which affects your rights.

SEB Merchant Banking Country Risk Analysis October 27, 2008

USD/UAH

ëÉÅíçê=~ÅÅçìåíáåÖ=Ñçê=QM=B=çÑ=íçí~ä=Éñéçêíë=~åÇ=S=B=çÑ=damK=qÜÉ=áåÑä~íáçå=êÉã~áåë= ÜáÖÜ=~í=ãçêÉ=íÜ~å=OM=BI=~äÄÉáí=Ççïå=Ñêçã=áíë=éÉ~â=~í=PN=B=áå=j~ó=íÜáë=óÉ~êK= = pìÄëí~åíá~ä=~åÇ=ÖêçïáåÖ=ã~ÅêçÉÅçåçãáÅ=áãÄ~ä~åÅÉëK==qÜÉ=ÅìêêÉåí=~ÅÅçìåí=ÇÉÑáÅáí= Ü~ë=ÅçåíáåìÉÇ=íç=ïáÇÉå=ÇìÉ=íç=îÉêó=ëíêçåÖ=ÇçãÉëíáÅ=ÇÉã~åÇ=ÖêçïíÜ=~åÇI=ãçêÉ= êÉÅÉåíäóI=íÜÉ=ÉêçÇáåÖ=ÅçãéÉíáíáîÉåÉëë=çÑ=râê~áåÉÛë=ã~åìÑ~ÅíìêáåÖ=áåÇìëíêóK=qÜÉ= ÉñíÉêå~ä=íê~ÇÉ=ÇÉÑáÅáí=ïáÇÉåÉÇ=ëÜ~êéäó=ÇìêáåÖ=íÜÉ=Ñáêëí=Ü~äÑ=çÑ=íÜáë=óÉ~ê=íç=rpa=UKT= Äáääáçå=Åçãé~êÉÇ=íç=rpa=PKQ=Äáääáçå=ÇìêáåÖ=íÜÉ=ë~ãÉ=éÉêáçÇ=ä~ëí=óÉ~ê=áåÇáÅ~íáåÖ=~= ëáÖåáÑáÅ~åí=ïáÇÉåáåÖ=çÑ=ä~ëí=óÉ~êÛë=ÅìêêÉåí=~ÅÅçìåí=ÇÉÑáÅáí=çÑ=QKO=B=çÑ=dam=íç=~êçìåÇ= T=B=íÜáë=óÉ~êK=píêçåÖ=Å~éáí~ä=áåÑäçïëI=ÉëéÉÅá~ääó=caf=Äìí=~äëç=ëíÉééÉÇ=ìé=éêáî~íÉ= ëÉÅíçê=ÄçêêçïáåÖI=Ü~îÉ=ãçêÉ=íÜ~å=Ñìääó=ÅçîÉêÉÇ=íÜÉ=ÇÉÑáÅáí=~ääçïáåÖ=~=ÄìáäÇJìé=çÑ= áåíÉêå~íáçå~ä=êÉëÉêîÉë=íç=rpa=PU=Äáääáçå=áå=^ìÖìëí=Ñêçã=rpa=PO=Äáääáçå=ÉåÇ=çÑ=OMMTK= páåÅÉ=^ìÖìëíI=Å~éáí~ä=áåÑäçïë=Ü~îÉ=ëäçïÉÇ=ÄêáåÖáåÖ=íÜÉ=êÉëÉêîÉë=Ççïå=íç=rpa=PQ= Äáääáçå=áå=lÅíçÄÉêK== = mêÉëëáåÖ=ÉñíÉêå~ä=Ñáå~åÅáåÖ=ëíêÉëëÉë=åÉÉÇ=Ñçê=~å=fjcJäç~åK=dÉåÉê~ä=ÖçîÉêåãÉåí= ÇÉÄí=EÇçãÉëíáÅ=~åÇ=ÉñíÉêå~äF=íç=dam=êÉã~áåë=äçï=~í=NM=B=çÑ=dam=ÉåÇJOMMTK= eçïÉîÉêI=ÜáÖÜÉê=éêáî~íÉ=ëÉÅíçê=ÄçêêçïáåÖ=Ñêçã=~Äêç~Ç=áåÅêÉ~ëÉÇ=Öêçëë=ÉñíÉêå~ä=ÇÉÄí= íç=rpa=NMM=Äáääáçå=ãáÇJOMMU=Ñêçã=rpa=PM=Äáääáçå=ÉåÇJOMMQI=áåÅäìÇáåÖ=~=ëÜ~êé=êáëÉ=áå= ÑçêÉáÖå=ÄçêêçïáåÖ=Äó=Ä~åâë=íç=rpa=PU=Äáääáçå=Ñêçã=rpa=N=Äáääáçå=ä~êÖÉäó=ÇìÉ=íç= Ñáå~åÅáåÖ=Äó=ÑçêÉáÖå=é~êÉåíë=EëÉÉ=Öê~éÜ=çå=é~ÖÉ=QFK=qÜáë=äÉ~îÉë=íÜÉ=ÉÅçåçãó= áåÅêÉ~ëáåÖäó=îìäåÉê~ÄäÉ=íç=Ä~ä~åÅÉJçÑJé~óãÉåí=êáëâë=~åÇ=ÇÉíÉêáçê~íáåÖ=ÖäçÄ~ä= äáèìáÇáíó=ÅçåÇáíáçåëK=få=îáÉï=çÑ=íÜáëI=íÜÉ=êÉÅÉåíäó=~ÖêÉÉÇ=fjcJéêçÖê~ã=ëìééçêíÉÇ=Äó= ~=rpa=NSKR=Äáääáçå=äç~å=ìåÇÉê=~=OQJãçåíÜ=pí~åÇJ_ó=^êê~åÖÉãÉåí=ïçìäÇ=ÜÉäé=É~ëÉ= íÜÉ=éêÉëëáåÖ=ÉñíÉêå~ä=Ñáå~åÅáåÖ=åÉÉÇë=~åÇ=ÅçìäÇ=ÜÉäé=êÉëíçêÉ=ÉÅçåçãáÅ=~åÇ=Ñáå~åÅá~ä= ëí~ÄáäáíóK=eçïÉîÉêI= Exchange rate íÜÉ=äç~å=ïçìäÇ=çåäó= 6.00 ÅçãÉ=áÑ=râê~áåÉÛë= é~êäá~ãÉåí=~ééêçîÉë= 5.75 ~=é~Åâ~ÖÉ=çÑ= Reference rate 4.95 +/- 8 % ÉãÉêÖÉåÅó= äÉÖáëä~íáçå=~áãÉÇ=~í= 5.50 ëìééçêíáåÖ= ÅçåÑáÇÉåÅÉ=~åÇ= 5.25 äáèìáÇáíóK == 5.00 mêÉëëìêÉ=çå=íÜÉ= ÉñÅÜ~åÖÉ=ê~íÉ=äáâÉäó= íç=ÅçåíáåìÉK=qÜÉ= 4.75 `Éåíê~ä=_~åâI=ïÜáÅÜ= âÉéí=íÜÉ=ÉñÅÜ~åÖÉ= 4.50 ê~íÉ=çÑ=íÜÉ=Üêóîåá~= Jan Mar May Jul Sep äáííäÉ=ÅÜ~åÖÉÇ= 08 Source: Reuters EcoWin ~Ö~áåëí=íÜÉ=Ççää~ê= íÜêçìÖÜçìí=OMMT=~åÇ=OMMSI=~ääçïÉÇ=áí=íç=íê~ÇÉ=ãçêÉ=ÑêÉÉäó=íÜáë=óÉ~êK==få=j~óI=íÜÉ= çÑÑáÅá~ä=r^eLrpa=ê~íÉ=ï~ë=êÉî~äìÉÇ=íç=QKUR=Ñêçã=íÜÉ=RKMR=äÉîÉä=éêÉî~áäáåÖ=ëáåÅÉ= ^éêáä=OMMR=~åÇ=áå=lÅíçÄÉê=íÜÉ=çÑÑáÅá~ä=ê~íÉ=ï~ë=ÇÉî~äìÉÇ=íç=QKVR=~åÇ=ÑäìÅíì~íáçåë= ã~êÖáåë=ïáÇÉåÉÇ=íç=HLJ=U=B=Ñêçã=íÜÉ=éêÉîáçìë=Q=BK==eçïÉîÉêI=íÜÉ=ÉñÅÜ~åÖÉ=ê~íÉ= ÇÉéêÉÅá~íÉÇ=Äó=OM=B=áå=lÅíçÄÉê=ÑçêÅáåÖ=íÜÉ=`Éåíê~ä=_~åâ=íç=áåíÉêîÉåÉ=êÉéçêíÉÇäó= ëéÉåÇáåÖ=~êçìåÇ=rpa=P=Äáääáçå=Ñêçã=áíë=ÑçêÉáÖå=ÅìêêÉåÅó=êÉëÉêîÉëK=açïåï~êÇ= éêÉëëìêÉ=çå=íÜÉ=ÉñÅÜ~åÖÉ=ê~íÉ=áë=äáâÉäó=íç=éÉêëáëí=áå=îáÉï=çÑ=ïçêëÉåáåÖ=íÉêãëJçÑ=íê~ÇÉ= ~åÇ=éççê=ÖäçÄ~ä=Ñáå~åÅá~ä=ÅçåÇáíáçåë=ÉîÉå=áÑ=íÜÉ=êÉÅÉåíäó=~ååçìåÅÉÇ=fjcJäç~å=ÅçìäÇ= ÜÉäé=~îçáÇ=~=ÅìêêÉåÅó=ÅêáëáëK= 2

SEB Merchant Banking Country Risk Analysis October 27, 2008

= _~åâáåÖ=ëÉÅíçê=íìêÄìäÉåÅÉK=râê~áåÉÛë=Ä~åâáåÖ=ëóëíÉã=ÉñéÉêáÉåÅÉÇ=ëçãÉ=ÇÉéçëáí= ïáíÜÇê~ï~äë=ÑçääçïáåÖ=íÜÉ=Ñ~áäìêÉ=çÑ=íÜÉ=ÅçìåíêóÛë=ëáñíÜ‐ÄáÖÖÉëí=Ä~åâI=mêçãáåîÉëíI= ~ãáÇ=~=äáèìáÇáíó=ëèìÉÉòÉK=qÜÉ=`Éåíê~ä=_~åâ=Ü~ë=~ååçìåÅÉÇ=ëÉîÉê~ä=ëìééçêí=ãÉ~ëìêÉë= Ñçê=íÜÉ=Ä~åâáåÖ=ëóëíÉãI=áåÅäìÇáåÖ=~=Ä~å=çå=É~êäó=ïáíÜÇê~ï~ä=çÑ=íÉêã=ÇÉéçëáíë=~åÇ= Éñíê~=äáèìáÇáíó=ëìééçêí=Ñêçã=íÜÉ=ÅÉåíê~ä=Ä~åâK=qÜÉ=Ä~åâáåÖ=ëóëíÉã=áë=ÜáÖÜäó= Ççää~êáëÉÇ=ïáíÜ=RN=B=çÑ=äç~åë=ÇÉåçãáå~íÉÇ=áå=ÑçêÉáÖå=ÅìêêÉåÅóK=fÑ=~ééêçîÉÇ=ëççåI=íÜÉ= fjcJé~Åâ~ÖÉ=ïçìäÇ=Öç=~=äçåÖ=ï~ó=áå=éêÉîÉåíáåÖ=~=ãÉäíÇçïå=çÑ=íÜÉ=Ä~åâáåÖ=ëóëíÉãK= kÉîÉêíÜÉäÉëëI=áå=îáÉï=çÑ=íÜÉ=ä~êÖÉ=ìåÜÉÇÖÉÇ=ÑçêÉáÖå=ÉñÅÜ~åÖÉ=ÄçêêçïáåÖI=ÉëéÉÅá~ääó= Äó=ÜçìëÉÜçäÇëI=~=ëÜ~êé=Ççïåï~êÇ=ÅçêêÉÅíáçå=çÑ=íÜÉ=ÉñÅÜ~åÖÉ=ê~íÉ=ïçìäÇ=Ü~îÉ=ÅäÉ~ê= åÉÖ~íáîÉ=áãé~Åí=çå=~ëëÉí=èì~äáíó=áå=íÜÉ=Ä~åâáåÖ=ëóëíÉãK=qÜ~í=ÅçìäÇ=êáëâ=áåëçäîÉåÅó=çÑ= ïÉ~âÉê=Ä~åâëK== = J=G=J= = qÜÉ=râê~áåá~å=ÉÅçåçãó=áë=ëìÑÑÉêáåÖ=Ñêçã=ä~êÖÉ=ã~ÅêçÉÅçåçãáÅ=áãÄ~ä~åÅÉëI= áåÅäìÇáåÖ=ÜáÖÜ=áåÑä~íáçåI=~=ïáÇÉåáåÖ=ÅìêêÉåí=~ÅÅçìåí=ÇÉÑáÅáí=~åÇ=ÜáÖÜÉê=ÉñíÉêå~ä= Ñáå~åÅáåÖ=åÉÉÇëK=fí=áë=åçï=ëäçïáåÖ=~Äêìéíäó=ÇìÉ=íç=ëÜ~êéäó=Ñ~ääáåÖ=ëíÉÉä=éêáÅÉë= ÜìêíáåÖ=íÜÉ=ä~êÖÉëí=Éñéçêí=ëÉÅíçêK=qÜÉ=ÅçãÄáå~íáçå=çÑ=ÖäçÄ~ä=Ñáå~åÅá~ä=ã~êâÉí= íìêãçáäI=ïçêëÉåáåÖ=ã~ÅêçÉÅçåçãáÅ=ÑìåÇ~ãÉåí~äë=~åÇ=éçäáíáÅ~ä=ìåÅÉêí~áåíó=Ü~îÉ= êÉëìäíÉÇ=áå=ÇÉéçëáí=ïáíÜÇê~ï~äI=ÜáÖÜÉê=ÇçãÉëíáÅ=ãçåÉó=ã~êâÉí=ê~íÉë=~åÇ=Ççïåï~êÇ= éêÉëëìêÉ=çå=íÜÉ=ÉñÅÜ~åÖÉ=ê~íÉ=ÜìêíáåÖ=íÜÉ=~äêÉ~Çó=ïÉ~â=Ä~åâáåÖ=ëÉÅíçêK=râê~áåÉÛë= áåÅêÉ~ëáåÖ=êÉäá~åÅÉ=çå=ÉñíÉêå~ä=Ñáå~åÅÉ=ã~âÉë=áí=é~êíáÅìä~êäó=îìäåÉê~ÄäÉ=íç=íÜÉ= ÅìêêÉåí=ÖäçÄ~ä=ÉÅçåçãáÅ=~åÇ=ÅêÉÇáí=ëáíì~íáçåK=qÜáë=Ü~ë=íêáÖÖÉêÉÇ=ëÉîÉê~ä=ÇçïåÖê~ÇÉë= Äó=íÜÉ=ê~íáåÖ=~ÖÉåÅáÉëK==râê~áåÉ=Ü~ë=~ëâÉÇ=Ñçê=Ñáå~åÅá~ä=~ëëáëí~åÅÉ=Ñêçã=íÜÉ=fjcK=qÜÉ= êÉÅÉåíäó=~ååçìåÅÉÇ=fjcJéêçÖê~ã=áåÅäìÇáåÖ=~=rpa=NSKR=Äáääáçå=äç~å=ÅçìäÇ=ÜÉäé= êÉëíçêÉ=ÉÅçåçãáÅ=~åÇ=Ñáå~åÅá~ä=ëí~ÄáäáíóK=eçïÉîÉêI=íÜ~í=ÇÉéÉåÇë=çå=íÜÉ=râê~áåá~å= é~êäá~ãÉåí=~ÇçéíáåÖ=ÉãÉêÖÉåÅó=äÉÖáëä~íáçå=íç=ëìééçêí=íÜÉ=Ä~åâáåÖ=ëóëíÉãI= Ä~ä~åÅáåÖ=íÜÉ=ÄìÇÖÉí=~åÇ=~ÇÇêÉëë=íÜÉ=ÅìêêÉåíJ~ÅÅçìåí=ÇÉÑáÅáí=éêçÄäÉã=~ë=êÉèìáêÉÇ=Äó= íÜÉ=fjcK== = =

Key ratios

2008

Population

45.9

GDP/capita ($)

4592

GDP (change)

6%

Inflation

Resilience 12 10 8 6

Macro balance

4

Liquidity

2 0

25%

`ìêêK^ÅÅK=Ä~ä~åÅÉLdam

-7.1%

Reserves/imports (months) Budget balance/GDP

3.7 -1.6%

Government debt/GDP bñíÉêå~ä=ê~íáåÖëW= cáíÅÜW===_HLåÉÖ~íáîÉ jççÇóDëW=_NI=ëí~ÄäÉ pCmW==_LåÉÖ~íáîÉ

How to read the chart? Moving out from the center reduces risk.

Absence of event risk Ukraine

13% mÉÉêëW _ê~òáä= mÜáäáééáåÉë=

qìêâÉó=

25%

Information Average EM

Russia

Graph: Ukraine shows no particular strengths but is generally weaker than the average emerging market country as illustrated by the red solid line falling uniformly inside the blue broken one. =

= = 3

SEB Merchant Banking Country Risk Analysis October 27, 2008

Key data: 2003 2004 2005 GDP (bill.US$) 50.1 64.9 86.1 GDP/capita (US$) 1052 1372 1836 GDP (real change) 9.6% 12.1% 2.5% Investments/GDP 20.6% 22.1% 22.4% Budget balance/GDP -0.2% -3.2% -1.8% Govt debt/GDP 25.4% 24.7% 17.7% CPI inflation (%) 5.2% 9.0% 13.5% Money demand (%) 42.4% 23.3% 40.2% Stock prices (%change) 60 139 321 Interest rates 7% 9% 10% Exch. Rate ($) 5.3 5.3 5.1 Trade/GDP (%) 113% 115% 102% Oil price (Brent $) 29 38 54 Billions US $ Export of goods 29.0 39.7 44.3 Imports of goods 27.7 34.8 43.6 Other: 1.6 2.0 1.8 2.9 6.9 2.5 Current account (% of GDP) 5.8% 10.6% 2.9% FDI 1.4 1.7 7.5 Loan repayments -2.9 -3.2 -4.3 Net other capital flows 1.1 -2.6 3.8 2.5 2.8 9.5 Balance of payments Reserves 6.7 9.5 19.0 Total debt 24.0 30.2 33.3 o/w short term debt 9.0 10.4 12.1 Sources: Oxford Economic forecasting and SEB estimates

2006 107.8 2314 7.9% 24.7% -0.7% 13.6% 9.1% 25.0% 413 9% 5.1 96% 65

2007 141.2 3055 7.7% 28.6% -0.9% 12.4% 12.8% 37.8% 932 8% 5.1 96% 73

2008 189.6 4134 6.2% 29.7% -1.6% 12.7% 25.2% 10.4% 740 13% 5.0 99% 103

2009 209.0 4592 2.5% 30.2% -2.4% 15.8% 14.0% 3.8%

2010 238.1 5270 4.5% 30.8% -2.0% 18.4% 9.0% 4.9%

12% 5.3 103% 65

11% 5.3 100% 65

50.2 53.3 1.5 -1.6 -1.5% 5.7 -5.7 4.4 2.9 21.8 49.9 15.4

64.0 71.9 2.0 -5.9 -4.2% 9.2 -7.8 14.5 9.9 31.8 77.3 23.8

86.7 101.5 1.3 -13.5 -7.1% 12.4 -9.6 15.1 4.3 36.1 102.2 31.5

99.8 115.5 -3.9 -19.6 -9.4% 10.1 -12.5 29.4 7.5 43.5 126.0 38.8

110.9 126.6 -5.4 -21.1 -8.9% 11.6 -17.1 33.0 6.3 49.8 147.5 45.4

Rating history Fitch (eoy) Moody's (eoy) S&P (eoy) Type of government: Next elections Other: Latest PC deal Latest IMF arrangements

B+ B+ BBBBBBB1 B1 B1 B1 B1 B B+ BBBBBBParliamentary democracy Snap elections likely Dec 14 2008. Presidential elections Jan. 2010 2001/active 2004/SBY

In te r e s t r a te s

Gross external debt (USD billion)

3 0 .0 2 7 .5

100 80 60 40 20 0

2 5 .0

Percent

2 2 .5 2 0 .0 1 7 .5 1 5 .0 1 2 .5 1 0 .0

2003

7 .5

2004

2005

2006

2007

2008

5 .0 04

05

06

07

08

General Government

P o lic y R a t e s , D is c o u n t R a t e ( R e f in a n c in g R a t e ) In t e r b a n k R a t e s , K IE IB O R , 3 M o n t h , F i x i n g S o u r c e : R e u te r s E c o W i n

5 0 W a g e s ( lh s )

S t o c k m a r k e t (P F T S In d e x )

11 10 9 8

2 5

4 0 2 0

2 5

1 0

2 0

5 0 3

0 4

0 5

0 6

0 7

0 0 0 0

700 600 500 400 300

0

200 100 0

-5 0 2

0 0 0 0

5 1 5 1 0

Index

1 5

Percent

Percent

3 5 3 0

Others sectors

1300 1200

3 0

C P I (rh s )

4 5

Banks

0 8

02

03

04

05

06

07

08

S o u r c e : R e u te rs E c o W i n S o u rc e : R e u te rs E c o W in

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SEB Merchant Banking Country Risk Analysis October 27, 2008

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5