Ukrainian President Volodymyr Zelenskyy, before the IMF Board of Directors made a positive decision on the allocation of $2.2 billion to Ukraine for the fifth tranche under the EFF extended financing program, signed the law on resetting the Bureau of Economic Security (#3840-IX), the adoption of which was one of the structural beacons of the program.
Information about the signing of the document by the head of state is posted on the website of the Verkhovna Rada.
“An important step forward was the adoption last week of the law on reforming the Bureau of Economic Security of Ukraine. It is necessary to quickly and decisively implement this law”, – said the head of the mission of the International monetary Fund (IMF) in Ukraine Gavin Gray at a press conference on Friday evening after the allocation of the tranche to Ukraine.
As reported, the Verkhovna Rada on June 20 by 239 votes with the required minimum of 226 votes adopted the law on the reset of the BEB. “The text is agreed with partners. With independent selection of the new head of the BEB, recertification and personnel selection. With the participation of foreign experts and Ukrainian business. It could have been better, but already well done,” – commented on the adoption of the first Deputy head of the relevant Committee of the Rada Yaroslav Zheleznyak.
According to him, according to the document, the new head of the BEB is selected by a commission of six members, half of whom are international experts with the right to a casting vote. Re-certification is carried out by a commission of six people each from the newly elected BEB director and from international partners, but at the suggestion of the Ukrainian business community. In addition, a Personnel Commission created according to the same scheme will work for the next three years.
“Guaranteed independence of the BEB director at the level of NABU/SAP/NAPK. And many more important changes about the independence of the institution. It is always possible more and better, but in general very ok”, – summarized Zheleznyak.
BEB reboot, IMF, LAW, ZELENSKY
The weather in Ukraine on Sunday, June 30, will be without precipitation, reports Ukrhydrometcenter.
Wind of variable directions, 3-8 m/s.
The temperature will be 16-21° at night, 29-34° during the day, in southern and central regions in some places 32-36°; in the highlands of the Carpathians at night 10-15°, 22-27° during the day.
In Kiev on June 30, no precipitation. Wind of variable directions, 3-8 m/s.
The temperature is about 20° at night and 30-32° during the day.
According to the Central Geophysical Observatory named after Boris Sreznevsky in Kiev. Boris Sreznevsky in Kiev on June 30, the highest daytime temperature was 34.1° in 1898, the lowest nighttime temperature was 7.6° in 1894.
On the first day of July in Ukraine in the western regions, rain with thunderstorms, hail and squalls 15-20 m/s, temperatures at night 15-20°, daytime 27-32°.
In the rest of the territory hot weather without precipitation, the temperature at night 17-22 °, during the day 30-34 °, in the southern part, Kirovograd, Dnipropetrovsk and Donetsk regions in some places strong heat 35-37 °.
Wind of variable directions, 3-8 m/s.
In Kiev on July 1, hot weather without precipitation. Wind of variable directions, 3-8 m/s.
The temperature is 20-22° at night and 32-34° during the day.
The International Monetary Fund (IMF) has worsened its forecast for real gross domestic product (GDP) growth for this year from 3-4% to 2.5-3.5% at the end of the fourth review of the EFF extended financing program, while improving its year-end inflation forecast from 8.5% to 8%.
“We are now seeing clear signs of a slowdown in growth due to deteriorating sentiment as military action develops and also due to power outages,” Gavin Gray, head of the International Monetary Fund (IMF) mission to Ukraine, said at a press conference on Friday evening after Ukraine’s tranche was disbursed.
Risks remain exceptionally high, he said, especially due to uncertainties related to the war and external financing.
According to a publication on the Fund’s website, for next year, expectations for Ukrainian economic growth have been worsened to 5.5% from 6.5%, while maintaining the inflation estimate of 7%.
The IMF also lowered its forecast of Ukraine’s nominal GDP for this year to UAH 7.49 trillion from UAH 7.75 trillion in its March review, and for next year to UAH 8.74 trillion from UAH 8.87 trillion.
In terms of GDP composition, the IMF slightly worsened expectations for net exports, while expecting a larger contribution from domestic demand, private consumption and investment compared to the March revision.
The Fund improved the inflation forecast for the end of this year to 8% from 8.5%, maintaining its expectations for its slowdown to 7%, 5.5% and 5% in 2025-2027, but lowered expectations for real income growth this year and next year: by 1.2 p.p. to 8.6% and by 1 p.p., respectively. – to 8.6% and by 1 p.p. to 6.8%. – to 6.8%.
Also, the fourth revision slightly worsened the unemployment estimate: to 14.8% from 14.5% this year and to 14.3% instead of 13.8% next year.
As for the budget, the IMF has increased the estimate of its deficit (excluding grants) – to 20.9% of GDP from 20.2% of GDP for this year, to 10.4% of GDP from 10.3% of GDP for 2025.
According to the document, expectations for external financing have been improved to 12.1% of GDP from 11.8% of GDP and domestic financing to 2.1% of GDP from 2% of GDP, which should be provided by banks, while the estimate of external financing for next year remained at 6.5% of GDP, domestic – 0.9% of GDP with a reduction in the participation of banks to 0.5% of GDP.
As reported, last year the Ukrainian economy, according to the State Statistics Committee, grew by 5.3% after falling by 28.8% a year earlier, and in the first quarter of this year growth amounted to 6.5%.
On April 25 this year, the NBU worsened the country’s GDP growth forecast for this year from 3.6% to 3%.
The government, when approving the draft state budget for the second reading in early November 2023, projected economic growth this year at 4.6%, but the Finance Ministry recently said it had been worsened to 3.5%, and First Deputy Prime Minister Yulia Sviridenko said in mid-June in Berlin that the forecast had been worsened to less than 4%.
The prices of sale and purchase of agricultural land in May 2024 significantly increased compared to the previous months and are now the highest for the entire existence of the land market: the weighted average price per hectare in May was 45.0 thousand UAH, which is 8.2% higher than in April 2024, and 5.6% higher than in March this year, according to a study by the Kyiv School of Economics (KSE), which is conducted on behalf of the USAID program.
According to analysts, the price of land with the intended purpose “for commercial agricultural production” was even higher and reached UAH 46.2 thousand.
“The above prices are based on the official prices registered in the Register of Property Rights during sale and purchase transactions. Market prices for land can be much higher, because most of all transactions are concluded at a price that does not differ from the normative-monetary valuation (the minimum price established by law for former sub-moratorial lands) by more than 2%,” the KSE clarified.
At the same time, experts believe that a slight decrease in prices in April 2024 and an increase in the cost of agricultural land in May this year is unlikely to be a long-term trend.
Since the beginning of 2024, average land prices remain significantly higher than in previous periods. Consequently, it can be stated that the opening of the land market for legal entities in January 2024 has led to structural changes in the market conditions, and as a consequence has led to an increase in the value of agricultural land, according to the KSE study “Land of Indestructibility”.
The Association “Insurance Business” (ASB) appealed to the deputies of the Verkhovna Rada with a request to postpone the deadline for bringing the activities of insurance companies in line with the requirements of the law “On Insurance”, according to the information of the association. According to the new version of the law “On Insurance” adopted on November 18, 2021, insurers must bring their activities in line with its norms until July 1 this year
“We have prepared to the members of Parliament a very reasonable proposal to postpone this deadline to January 1, 2026,” – said the general director of the ASB Vyacheslav Chernyakhovsky.
He pointed out that during the preparation and adoption of the law it was planned that all the changes stipulated by it would be introduced under normal conditions of a relatively stable political and economic situation. But three months after its adoption, Russia’s full-scale military aggression began.
“It is clear that such cardinal changes are impossible in the new conditions of war and the struggle of the whole country with the biggest crisis in its existence,” he emphasized.
In support of this, Chernyakhovsky cites the following facts, in particular, the fact that the vast majority of NBU regulations were adopted in the last decade of December 2023, of which 10 NPAs have an ultra-high level of influence on all business processes of insurers. The consequence of these changes in legislation and regulatory framework is the need to update all internal documents of insurance companies (more than 100 documents with a total volume of more than 1 thousand pages), development of new insurance terms and conditions instead of insurance rules, forms for all insurance contracts, new software, etc.
“Based on this, insurers actually do not have the technical and physical ability to implement all these cardinal changes for the first half of 2024, which also accounts for the compilation and submission of all annual reports to all government agencies, the audit of financial statements, owners’ meetings, etc.” – is noted in the report
As confirmation of the data of the survey conducted by three insurance associations (ASB, LSOU, NASU) in April 2024 on readiness for the new norms of the law, which showed that out of 59 insurance companies that participated in the survey (61% of the total number of companies in the market, which own 86% of the total amount of premiums), only 20% believed that they will be fully ready to complete the necessary modernization of their activities before the date of entry into force of the requirements of the new law.
The Law “On Insurance” also introduces new capital requirements: the minimum amount of which is raised to UAH 32 mln. or UAH 48 mln. depending on the classes of insurance activities and regardless of the size of business and liabilities of the insurer, which negatively affects primarily insurers with Ukrainian capital, the report says.
“Such requirements put in unequal conditions small (mainly with Ukrainian owners) and large insurance companies. It is especially difficult to fulfill them to regional insurers, in particular, working in the regions most affected by Russian aggression: Zaporizhzhya, Kharkiv, Chernihiv and Odessa regions”, is noted in the message.
The volume of completed construction works in Ukraine in January-March 2024 increased by 56.7% compared to the same period of 2023 – up to 35.5 billion UAH, according to the data of the State Statistics Service (Gosstat).
In March-2024, the index of construction products exceeded the index of March-2023 by 69.3%, and the previous month – by 92.3%, notes the State Statistics Service.
As reported by the State Statistics Service, in January-March 2024 to the same period of 2023, the growth in the volume of
construction was observed in all segments. Thus, in residential construction growth amounted to 39.2%, in non-residential – 49%, in engineering – 66%.
According to seasonally adjusted data of the department, the indexes of construction output in March-2024 in residential construction amounted to 55.9%, in non-residential construction – 105.5%, in engineering – 193.4%, and taking into account the effect of calendar days, the indicators are 52.1%, 82.6% and 148.6% respectively.
The proportion of new construction to the total volume of completed construction works in the first quarter amounted to 46.7%, repair – 25%, reconstruction and technical re-equipment – 28.3%.
The State Statistics Committee notes that the publication of data was postponed due to martial law. Statdata indicators are given without taking into account the temporarily occupied territory and the part of the territory where hostilities are (were) conducted.
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