Ukraine may not suffer to the extent it did when metals prices plunged during the global financial crisis three years ago, investment bank Renaissance Capital said.
“Assuming a worst-case scenario of declining commodity prices, which are crucial for Ukraine, the country may be less sensitive to global cooling than in 2008-2009,” analysts Anastasia Golovach in Kiev, the Ukrainian capital, and Ivan Tchakarov in Moscow wrote in a report today. “Despite the panic in the global financial markets, steel, iron ore and cooking coal prices have remained relatively stable.”
Metals and mining helped drive Ukraine’s economy before the crisis, according to Renaissance. Recovery in the former Soviet republic is largely the result of increased real wages and a higher propensity to consume, it said.
“We think salaries will continue to grow, particularly as the country is expecting parliamentary elections in October 2012,” the analysts wrote.