The deficit of Ukraine’s state budget for 2019 was UAH 78.05 billion with the ceiling set in the national budget being UAH 91.13 billion, while in 2018 the deficit of the national budget was UAH 59.25 billion with the ceiling of UAH 94.1 billion. According to the updated information posted by the State Treasury Service of Ukraine on its website, the deficit of the general fund was UAH 68.85 billion with the ceiling being UAH 69.62 billion.
In the early days of this year, the Ministry of Finance, citing recent data from the State Treasury Service, reported on the deficit of the national budget last year in the amount of UAH 72.4 billion, or 1.8% of GDP.
The 2019 state budget deficit was almost entirely funded by borrowings, as revenues from privatization amounted to only UAH 550 million, i.e. 3.2% of the initial budget assignment.
In accordance with the updated data of the State Treasury Service, the national budget receipts for 2019 increased 7.6%, to UAH 998.28 billion, including growth of 5.5% for the general fund, to UAH 879.83 billion.
Compared with the indicators laid down in the law on the national budget, the receipts target was met by 99.1%, including 96.9% for the general fund.
Last year, national budget expenditures amounted to UAH 1.073 trillion, which is 8.7% more than the expenses of the national budget 2018, including growth of 8.4% for the general fund, to UAH 952.98 billion.
Compared with the indicators laid down in the law on the national budget, the expenditure target was met by 98.2%, including 96.9% for the general fund.
The national budget of Ukraine for 2020 was approved with receipts of UAH 1.095 trillion, including UAH 975.17 billion for the general fund, and expenditure of UAH 1.182 trillion, including UAH 1.052 trillion for the general fund. The ceiling for the deficit is set at UAH 94.3 billion, or 2.09% of forecast GDP.
The idea of an “investment nanny” for investors includes signing agreements with the government of Ukraine on specific conditions in case of violation of which the Cabinet of Ministers will respond in international courts, Minister of Economic Development, Trade and Agriculture Tymofiy Mylovanov has said. “The idea of an “investment nanny” is that the government of Ukraine signs specific conditions with the investor and thus the government will responsible to the investor in international courts for violations, while the investor will also be responsible to the government of Ukraine – this is a mirror agreement,” he said on the air of the Freedom of Speech (Svoboda Slova) program on ICTV.
The minister is confident that in this way the state shows foreign and Ukrainian investors that it is ready to ensure the rule of law. Mylovanov added that in parallel with this, the judicial and law enforcement systems should be reformed to build trust in them.
“It’s about the right to sign an agreement. Today the law does not allow the Cabinet of Ministers to sign a separate agreement. Are we signing international agreements? It’s the same thing, because we sign them with international financial organizations, and this is a big investor. Is the one with the IMF an international agreement? It is an individual international deal with a large international investor. Do we sign agreements with the EBRD [the European Bank for Reconstruction and Development] and the World Bank? Yes, and now we say that any large investor, not only international financial organizations, will get the right to sign a contract with the government,” the minister said.
Official rates of banking metals from national bank as of January 28
One troy ounce=31.10 grams
National bank of Ukraine’s official rates as of 28/01/20
Source: National Bank of Ukraine
The main risks of the new coronavirus pandemic are the additional expansion of the trade deficit and the increase in the cost of external borrowing for Ukraine, Oleksandr Martynenko, the head of the corporate analysis unit at ICU Investment Group, has told Interfax-Ukraine. “Possible restrictions on the movement of people and goods, the deterioration of business sentiment due to an epidemic in China could lead to a slowdown in economic growth in this country. In turn, this may affect the global foreign economic situation, including the demand of countries that are the main foreign trade partners of Ukraine,” he explained.
“Many commodity markets will suffer, as they reflect the expectations of markets for the growth of the global economy as a whole, and these expectations will inevitably worsen in the event of a pandemic. In particular, prices for agricultural exports from Ukraine may also decrease,” Dmytro Khoroshun, an analyst from Concorde Capital, said.
He specified that in Ukraine in the event of an epidemic expansion and a decline in consumption in China, the mining and metallurgy sector (iron ore mining, steel production) could suffer most of all, while a drop in oil prices would be positive for Ukraine. At the same time, the analyst suggested that after the situation with the epidemic/pandemic is resolved, China would dare to further stimulate the economy, which could be a positive factor for iron and steel prices.
At the same time, Martynenko said that the flows of negative information about coronavirus had already done great damage to raw material prices, first of all, oil sagged (about minus 10% since the beginning of last week), followed by copper (5% down) and other metals.
“In the event of a prolonged fight against the virus, the Ukrainian mining and metallurgical complex may suffer due to lower export prices for steel and iron ore. At the same time, a decrease in the world oil prices could compensate for at least part of Ukraine’s losses of export revenue from the mining and metallurgical complex,” the ICU analyst state
Ukraine in 2019 increased import of oil (according to foreign trade activity code 2709) by 3.1% (by 23,796 tonnes) compared to 2018, to 790,628 tonnes.
According to the State Customs Service, last year oil was imported for $405.748 million, which is 6% less than in 2018 ($431.735 million).
Azerbaijan supplied raw materials worth $309.443 million (a share of 76.26%), the United States for $90.999 million (22.43%), Kazakhstan for $2.596 million (0.64%), and other countries for $2.710 million (0.67%).
In 2019, Ukraine exported 103 tonnes of oil worth $53,000. The entire volume was delivered to Latvia in June.
