Where will the money come from to finance growth needs?

Inflationary years are always accompanied by worsening savings’
dynamics as it was the case in 2008. Savings to disposable income
ratio ranged between 7.6% and 7.8% during 2008 though it stood well
above 10% in 2004-2006. Real interest rates for private deposits were
negative and especially high in early 2008 keeping the households
from savings. We expect the moderating inflation and current hike in
deposit interest rates exceeding 19% for hryvnya and 13% for US
dollar to begin driving savings in late 2008 and in early 2009. In
addition, spending boom is also near its peak and estimated UAH 610
bln ($ 120 bln) of households’ spending in 2008 will likely to be held
down by moderating inflation and more incentives to deposits.
In addition to the households’ savings, needs in financing fixed capital
investment will be covered by enterprises’ funds, whose growth was
twice as low in 2008 as that of households’ funds, mainly as a result
of credit crunch.

Finally, foreign investors’ funds, which surged by 21% y-o-y in 1H08
and are expected to add $9.5 bln to the total FDI in 2008, will
continue growing in 2009 mainly in the mining sectors, agriculture,
chemicals and steel tubes production where the most IPOs are
scheduled.