Some optimism about Ukraine's pharmaceuticals market, providing there is modest economic growth

The Ukrainian economy was dangerously close to collapse in 2009. The performance of the pharmaceutical market has reflected a very rocky year. The devaluation of the hryvnia is expected to drive a 27.1% contraction in value in 2009, though growth of 18.1% will be seen in local currency terms, according to Business Monitor International's latest forecasts.

Based on current macroeconomic forecasts, as well as an overhaul of historic data, BMI says it is more optimistic about the markets longer-term growth potential. Providing the economy returns to modest growth in 2009 with Gross Domestic Product (GDP) forecast by BMI to rise by 1.3% in 2010 after a 14.7% contraction in 2009 and the currency can avoid a further, major devaluation, it forecasts the market can deliver a five-year US dollar compound annual growth rate (CAGR) of 18.98% between 2009 and 2014. According to its new 10-year forecasts, BMI sees a US dollar CAGR of 12.52% over 2009- 2019.

Such an outlook is admittedly optimistic given the confluence of troubling news in the fourth quarter of 2009. The country's state-owned gas operator Naftogaz carried out a successful restructuring of its Eurobonds as well as other bilateral debt due at the end of September. This helped stave off a catastrophic default. Still, the state appears has been making ends meet and fulfilling crucial gas payments to Russia on disbursements from the International Monetary Fund (IMF). The IMF suspended further disbursements in November after lawmakers passed legislation which would boost social spending and state-sector wages.