The World Bank has improved the forecast for Ukraine’s GDP growth in 2019 from 3.4% to 3.6%, World Bank Senior Economist Anastasia Golovach has said.
“For 2019, we do not expect any surprises and we think that Ukraine’s GDP will grow by 3.6%. A good indicator, but external risks, in some way, are increasing for Ukraine, so the structural transformation of the economy is important,” she said at a press conference in Kyiv on Tuesday.
She noted that maintaining the current rate of economic growth will require an increase in capital investment, which amounted to 10% last year. This will require a greater influx of foreign direct investment.
At the same time, the bank kept forecasts of economic growth in 2020 at 3.7% of GDP, in 2021 at 4.2%, she said.
According to the banker, the deficit of the balance of payments in Ukraine in 2019 is expected to reach 3.1% of GDP, however, due to the potential loss of gas transit revenues and the unfavorable situation in the world markets, this figure will increase in 2020 and 2021 to 3.6% and 3.8% of GDP.
“But subject to rapid reforms, we expect in the next month that Ukraine will be able to maintain the economic growth rate at 3.7% in 2020 and accelerate it to 4.2% in 2021,” Golovach explained.
“An important factor in reducing pressure on the budget deficit is control over current budget expenditures and a balanced reduction in the minimum wage this year – only at the level of 12%, which is very contrasted with the previous years,” Golovach said.
Moreover, according to her, inflation will continue the downward trend: from 9.8% at the end of last year to 6.4% by the end of this year, as well as 5.5% and 5% in 2020 and 2021 respectively.
According to the bank’s expectations, in 2019 the deficit of the national budget of Ukraine will show a decrease to 2.1% in 2020 and 1.9% in 2021.
The World Bank believes that the level of public debt of Ukraine will also continue to decline this year to 51.7% of GDP. At the same time, the bank maintained the forecast for its further growth in 2020 and in 2021 to 54.6% and 55.3% of GDP respectively.
Prices for construction and assembly work in Ukraine in January-September 2019 increased by 7.8% compared with January-September 2018. According to the State Statistics Service, the indicators are given without taking into account the annexed territory of Crimea and Sevastopol, as well as part of the occupied territories of Donetsk and Luhansk regions.
According to statistics, since the beginning of the year, prices have risen in all segments of construction. So, in residential construction the growth was 9.8%, in non-residential some 6.6%, and in engineering 7%.
In September 2019 from September 2018, the cost of construction work in residential construction rose by 6.4%, in non-residential by 1.9%, and in engineering by 3.1%.
In addition, the State Statistics Service said that in September compared with August, the cost of construction of residential buildings increased slightly by 0.3%, engineering structures by 3.1%, while non-residential decreased by 0.3%.
According to the report, in 2018 prices for construction work in Ukraine increased by 23% compared to the previous year, while in 2017 by 13.4%.
Insurance companies that are members of the Motor (Transport) Insurance Bureau of Ukraine (MTIBU) as of October 31, 2019 had signed almost 1.030 million electronic OSAGO insurance contracts, the website of the bureau reports. According to the report, the total amount of premiums under such agreements exceeded UAH 757.3 million.
To date, OSAGO agreements in an electronic form are signed by 42 MTIBU member insurers.
Monthly, the number of electronic contracts is growing by 12-28%.
The leader in the number of electronic contracts is PZU Ukraine with 175,500 contracts worth UAH 147.8 million.
The share of top ten insurers in the number of signed electronic contracts in the total number of electronic policies is almost 74%, which is 6% less than the same indicator at the end of the first half of this year.
Electronic policies were introduced in February 2018 and became one of the first steps in the system of digitalization and the creation of a single digital OSAGO environment, which is defined as one of the priorities for the development of the industry and the work of the bureau.
Boryspil International Airport in the third quarter of 2019 and September 2019 ranked second in the ACI Europe rating in terms of passenger traffic growth among the airports intended for 10-25 million passengers per year.
According to data posted on ACI Europe’s website, in September (up by 27.6%) and in the third quarter (25.8% more), Boryspil airport ranked second following Milan airport (Italy) with a rise of 33.5% and 26.2% respectively.
In addition, Kharkiv International Airport was included in the top five ranking on the dynamics of passenger traffic growth among the airports for less than 5 million passengers. In September (66.3% more) it ranked second after Maribor Airport (Slovenia) with an increase of 92%, in the third quarter (up by 42.1%) following Targu Mures Airport (Romania, 113.5% more), Ohrid (Northern Macedonia, 53.8% more), and Turku (Finland, 52% more).
ACI Europe monthly compiles a rating of airports by passenger traffic, analyzing data from more than 230 European airports.
Airports Council International (ACI) is the only global airport sales office in the world. It is divided into branches: ACI Europe, ACI Africa, ACI Asia, ACI Latin American/Caribbean, ACI North America, and ACI Pacific.
Electricity production by all power plants of state enterprise Energoatom in January-October 2019 decreased by 1.9% (by 1.3 billion kWh) compared to the same period of the previous year, to 67.271 billion kWh.
According to the press service of the company, the plan for production of electricity for the specified period in 2019 was exceeded by 1.6%.
The share of Energoatom in the overall structure of electricity production in the country amounted to 53.1%, which is 0.1 percentage points less than in January-October 2018.
The power plants of the state enterprise for the reporting period supplied 63.170 billion kWh, which is 2% less than a year earlier.
The volume of capital investments for the ten months amounted to UAH 10.253 billion against UAH 9.270 billion. in January-October 2019, financing of capital investments was UAH 12.465 billion against UAH 9.983 billion.
During the reporting period, the company transferred UAH 12.205 billion to the budgets of all levels, insurance payments amounted to UAH 2.109 billion.
Milkiland, a dairy group with assets in Ukraine, Russia and Poland, saw EUR 11.39 million in net loss in January-September 2019, which is 15.1% more than a year ago.
According to a report of the group on the Warsaw Stock Exchange (WSE), consolidated revenue over the period slightly fell – by 2.3%, to EUR 96.57 million, and earnings before interest, taxes, depreciation and amortization (EBITDA) fell by 85.3%, to EUR 0.66 million.
In the nine months of 2019 Milkiland decreased its overall sales volumes by c. 29% on the back of significantly lower sales of cheese and butter products, which profitability were undermined by “the costs-prices scissors,” when the prices for finished goods lag behind the growing cost of the raw materials, namely, raw milk prices both in Russia and Ukraine. The prices for raw milk in Ukraine and Russia in January-September 2019 were by 9% and by 7.5% higher on average on year-over-year basis, respectively.
“Those unfavourable trends were aggravated by the situation with the appreciation on UAH and RUR against EUR in the reporting period,” the company said.
Due to the “scissors” effect and the growing completion in the Russian dairy market, first of all, in the market of the City of Moscow, Ostankino decreased the sales volumes of the whole-milk products by c. 9%, which led to decline of profitability of its business on EBITDA level by 6 pp. to practically zero on year-over-year basis.
Milkiland Ukraine in January-September 2019 focused on the development of sales of high value-added products, including innovative lactose-free cheese and whole milk products, primarily in the key accounts channel. As the result, this subsidiary of Milkiland managed to preserve its EBITDA margin almost at the same level of c.3% as in in January-September 2018.
Milkiland EU over the period faced a significant deterioration of the traditional business of the production and selling of dry milk products (WPC, permeate) triggered by non-favorable situation with the prices for these products in the global market, as well as declining sales of the cheese-mix products at the domestic market of Poland. As the result, the company generated losses at EBITDA level, which also decreased the overall EBITDA result of the group.
Milkiland Intermarket increased the sales of the group’s dry milk products in China and Kosher goods sales in Israel. The share of these two countries in the total sales of Milkland Intermarket exceeded 60%. The sales volumes of the dry milk products and butter by this company increased by c. 25% in January-September 2019 on year-over-year basis.
At the same time, growing input costs in Ukraine and revaluation of the Ukrainian currency against EUR and USD during the reporting period led to the situation, when the EBITDA margin of this increased sales slid to the negative territory.
