State-owned Ukrgasbank (UGB, Kyiv) has provided a UAH 226.6 million loan to Silpo supermarket chain to purchase more than 60 diesel generators, according to a press release from the financial institution.
“Uninterrupted power supply to supermarkets will contribute to their stable operation and, most importantly, guarantee the country’s food security,” the press service quoted Tetyana Parchevska, Director of Corporate Banking and Transaction Business at Ukrgasbank, as saying.
The state-owned bank did not disclose the rate at which the financing was provided or its term, citing the terms of the agreement.
According to the National Bank of Ukraine, as of October 1 this year, Ukrgasbank ranked 30th (UAH 199.05 billion) among 62 banks operating in the country in terms of total assets. The financial institution’s net profit for the first nine months of this year amounted to UAH 4.67 billion, while in the same period last year it was UAH 2.92 billion.
Silpo-Food LLC was established in early August 2016. According to Opendatabot, the founder of the company is PJSC Closed Non-Diversified Venture Corporate Investment Fund Retail Capital (100%, Kyiv), with Volodymyr Kostelman as the ultimate beneficiary. The chain’s total revenue in 2023 amounted to UAH 84.73 billion, which is 21% higher than in 2022.
According to its website, Silpo has 306 supermarkets in 60 cities of Ukraine and four Le Silpo delicatessens in Kyiv, Dnipro, Kharkiv and Odesa.
Maksim Urakin, Founder of the Experts Club Information and Analytical Center, PhD in Economics, shared his observations on key indicators and risks for the Ukrainian and global economies as of November 2024.
Macroeconomic situation in Ukraine
According to Maksim Urakin, Ukraine’s economy continues to show slow growth.
“According to the National Bank, in October 2024, Ukraine’s GDP grew by 1.3% compared to October last year. This is worse than the September figures, but significantly better than the data for the summer months. However, there are negative trends in agriculture. This year’s harvest was significantly lower than last year’s, which hit the agricultural sector, one of the key drivers of the economy,” said Maksim Urakin.
The expert also pointed to a sharp deterioration in the foreign trade balance.
“The deficit of foreign trade in goods increased by almost 6% over the first nine months, reaching a frightening $20 billion. The main reasons for this were the growth of energy imports and the lack of labor at export-oriented enterprises,” Urakin added.
According to the expert, Ukraine’s national debt is also a cause for great concern.
“As of October 2024, the debt is already 6.4 trillion hryvnias, or about $155 billion. At the same time, international reserves have decreased by more than $2 billion and amount to $36 billion,” Urakin emphasized.
Global economy: challenges and prospects
At the global level, the key risks are associated with the growing debt burden.
“Global public debt already exceeds $100 trillion, which is 93% of global GDP. In the coming years, this figure will continue to grow, which puts additional pressure on the budgets of most countries,” Urakin said.
The economies of developed countries, according to the expert, show heterogeneous dynamics. The United States is showing steady growth, with its GDP increasing by almost 3% in the third quarter. At the same time, the eurozone economy is actually stagnating, and Germany has faced zero dynamics, the economist said.
At the same time, China continues to play a key role in the global economy. “In the third quarter, China’s GDP growth remained at 5%, but the pace slowed due to geopolitical tensions and internal problems, particularly in the construction sector,” said Maksim Urakin.
Looking to the future
Maksim Urakin expressed cautious optimism about the long-term prospects.
“The global economy is facing many challenges, including inflation, geopolitical conflicts and protectionism. However, despite all the difficulties, there are reasons to believe that growth will continue at least within moderate limits,” he concluded.
The expert also called for more active international coordination to overcome economic challenges.
“Stability requires joint efforts, and only through dialogue and cooperation will we be able to minimize risks,” summarized Maksim Urakin.
You can learn more about current trends in the global economy in the video on the Experts Club YouTube channel: https://www.youtube.com/watch?v=grE5wjPaItI
You can subscribe to the channel here: https://www.youtube.com/@ExpertsClub
Relevance of World Trade Organization under scrutiny amid US president-elect’s protectionist stance
The sting of teargas was a price worth paying, said Michael Dolan, as he looks back on the Battle of Seattle and how the World Trade Organization’s attempt to break down the barriers to international trade was derailed by anti-globalisation protesters.
“The WTO has never recovered, it really hasn’t,” he said.
Dolan was one of the organisers of the blockades and marches that brought the Pacific coast city to a standstill in 1999 and plunged all attempts by WTO officials to construct a free trade agreement among more than 150 countries into disarray.
Developing world farmers and industrial workers in the US united against the move, which they saw as a neoliberal initiative in support of multinational corporations and an attack on their basic employment rights.
The WTO is under fire again, though this time from Donald Trump, whose return to the White House threatens to become an existential crisis for the global trade body.
Trump rejects the postwar mission to reduce barriers to free trade, including cuts to import tariffs, and argues they have mostly benefited China to the detriment of US businesses and workers.
Illustrating how much he believes a surcharge on imports will help US businesses, about three weeks before he secured a second term in the White House, Trump told an audience at the Economic Club of Chicago: “To me, the most beautiful word in the dictionary is tariff. It’s my favourite word. It needs a public relations firm.”
According to many WTO watchers, a rescue mission for the Geneva-based organisation is impossible since Trump gained control of the president’s executive powers and a Republican majority was confirmed in the US Senate and House of Representatives.
Within hours of taking office on 20 January next year, he could impose protectionist measures in breach of WTO rules on a host of countries, including China, the UK and the EU.
Last month he announced that he would sign an executive order placing a 25% tariff on all imports from Canada and Mexico, and a 10% duty on China, on top of existing duties, blaming drugs and migrants crossing US borders.
Dolan, who in 1999 was deputy of the Ralph Nader-funded pressure group Global Trade Watch, is happy to embrace Trump as a fellow critic of the way the WTO has put the price of goods above other criteria, such as the protection of homegrown jobs and decent wages.
China’s dominance of trade based on huge subsidies for its industrial base, undercutting US and European jobs, is another issue where Dolan and Trump see eye to eye.
“It is difficult to reconcile our victory in 1999 with the WTO decision to grant most favoured nation (MFN) status to China. It was like letting the fox into the hen house,” he says.
Only two years after abandoning its 1999 meeting in Seattle, the WTO met and agreed to bring China into the mainstream trade system, giving it the same MFN status that was designed for the poorest developing world nations.
From one perspective, it ushered in an era of cheap produce that lowered inflation to the benefit of consumers in the rich west. From another, it undermined jobs and living standards in countries that relied on a strong manufacturing base.
The overwhelming vote in favour of opening the door to communist China was widely seen as an emotional response to the 9/11 attack on the World Trade Center a few months earlier to unite the world against Islamist terrorists. It is one that many US Republicans and Democrats have come to regret.
Seeking to usher in a new era of global trade, the WTO met in Doha a year later to restart the Seattle talks and liberate agriculture, among other things, from protectionist rules. But the warm feelings had evaporated and objections from India, Brazil and US farmers prevented the “Doha round” from ever making progress. Despite a series of make-or-break meetings in the intervening 22 years, little progress has been made.
Alan Winters, a trade expert at the University of Sussex, says Trump has been a longstanding critic of China’s preferential treatment and will sign the death knell of the WTO whether he imposes tariffs or breaks from the multilateral WTO system to sign one-to-one sweetheart deals with his favoured nations.
“It is clear that multilateralism is very sick. The Doha round hasn’t yet been killed off, but it is deadlocked,” he says.
“And when the solution to avoiding tariffs is bilateral deals that lie outside the WTO system, it doesn’t look like getting better for the WTO any time soon.”
Julian Hinz, a trade expert at Germany’s Kiel Institute, said: “WTO rules still govern a big chunk of world trade. But the shift to protectionism means there is a risk the WTO declines into irrelevance.”
The nearest the organisation has come to recognising how Beijing’s massive manufacturing subsidies breach the rules can be found in a statement earlier this year that said there was an “overall lack of transparency” in the Chinese government’s financial accounting.
WTO rules are grouped into three main areas: goods, services and intellectual property
Created in 1995, the WTO is the permanent incarnation of the general agreement on tariffs and trade (Gatt), a set of regulations governing multilateral trade relations that had evolved since the 1940s.
WTO rules are grouped into three main areas: goods, services and intellectual property. According to the principle of the “single undertaking”, WTO members must accept all multilateral rules, ensuring they operate on an equal footing, although there are many clauses allowing countries to go their own way, especially if it means lowering protectionist barriers.
One reason for the failure of the Doha round is the need for all – now 166 members – to achieve a consensus, giving the director general, Ngozi Okonjo-Iweala, a headache whenever agreements need to be hammered out.
The first woman and first African to hold the position, she was blocked by Trump in his first presidency from taking office before an approving nod from the incoming Biden administration allowed her to ease past rival candidates.
In the past four years she has struggled through the pandemic and the inflation crisis that followed the Russian invasion of Ukraine to keep developing world organisations onside.
Considered a dealmaker rather than a smooth diplomat based on her former job as Nigeria’s finance minister, her main attempt to make some progress was a deal to share the intellectual property behind vaccines used in the pandemic. This was high on the wishlist of many developing world countries and championed by South Africa but was scuppered by the EU and UK, which sought to protect the interests of domestic pharmaceutical companies.
Okonjo-Iweala must also cope with a decision made by President Trump in his first term to block the appointment of judges to WTO courts, preventing the resolution of trade disputes.
In response to the latest threat from Trump, WTO officials met last month to reappoint Okonjo-Iweala, unopposed, for a second term before Joe Biden leaves office.
“What for?” asks Dolan. “Why does she want to do the job. The organisation is nothing more than a thinktank these days.”
Source: https://www.theguardian.com/world/2024/dec/03/can-the-worlds-trade-police-survive-trump-ii
During the Black Friday-2024 promotion (November 25 to December 2), Foxtrot’s turnover tripled compared to the three regular weeks of the month, the company’s press service told Interfax-Ukraine.
“These productive eight days have shown that customers’ interest in Black Friday remains at the pre-war level, but with adjustments to our realities. Among the sales drivers are products that primarily provide energy independence, mobility and comfort at the same time: such as a TV and charging station combo. Mobile gadgets and home appliances that Ukrainians prepare for each other for the upcoming holidays are also popular among the leaders,” said Oleksiy Zozulya, CEO of Foxtrot.
He said that the average check during the campaign added 10% to the previous year and amounted to almost UAH 9 thousand. At the same time, the longest receipt contained 112 items and broke last year’s record (there were 72 items in one receipt). Sales peaked on Saturday, November 30.
In general, compared to the previous three weeks, the company noted an increase in purchases of charging stations (+900%), TVs (+489%), accessories (+315%), large household appliances (+309%), small household appliances (+302%), IT and laptops (+271%), smartphones, tablets (+222%), and the category of non-core products increased by +270%.
The company also noted the top sellers by product group. Coffee makers were bought 4.5 times more, multicookers 3.5 times more, laptops almost three times more, refrigerators and washing machines three times more, smartphones and tablets more than twice as much.
Foxtrot added that all 124 of its retail stores operated smoothly during the blackout. In addition, on the eve of Black Friday, a mobile application was launched for sellers, which significantly accelerated the service and checkout process. As a result, half of the sales in retail stores were made using this mobile application, and 14% of payments for goods were made without the participation of a cashier – from the workplace of a sales assistant. The online service “Barrier-Free Foxtrot”, a service that provides sign language services to customers who cannot hear, was in high demand, including when purchasing equipment on credit.
As for online orders, their number on Foxtrot.ua increased by 40%, and 12% of new users registered on the resource (year-on-year). During the most active hours of Black Friday, up to 20 thousand customers were simultaneously on the site, and the number of daily orders more than doubled. An AI contact center consultant was also connected. During the Black Friday period, it processed 30% of the total number of requests for discounts, available bonuses, order statuses, delivery, store hours, etc.
As in the previous year, the distribution of traffic between mobile and desktop devices did not change significantly: mobile – 80%, desktop – 20%.
As for the regional component, the largest increase in sales was demonstrated by the Western and Central regions, where people buy gifts for St. Nicholas Day and Christmas and New Year holidays on Black Friday.
“Foxtrot is one of Ukraine’s largest omnichannel retailers in terms of the number of stores and sales of electronics and home appliances. The company operates 124 stores in 66 cities, all of which are energy-independent, an online platform Foxtrot.ua and a mobile application of the same name. In the first nine months of 2024, Foxtrot paid UAH 700.5 million in revenue.
The Foxtrot brand is developed by the Foxtrot group of companies. The co-founders are Valery Makovetsky and Gennady Vykhodtsev.
The State Enterprise “Forests of Ukraine” has announced the start of selling Christmas trees, the press service of the state enterprise reported in a telegram.
According to the report, prices for Christmas trees remain unchanged in 2024 – on average, 1 meter costs UAH 135. The price may vary by region. You can buy trees in the forestries of the State Enterprise “Forests of Ukraine”.
“Foresters grow these trees on special plantations in each region. The growing period is four to eight years. This “New Year’s harvest” is the fastest ripening. Trees usually grow for 60 years or more, depending on the species. Also, Christmas trees and pines are harvested during the felling of forest formation and rehabilitation, so there will be no harm to the ecosystem, only benefit,” the statement says.
The Forests of Ukraine also suggests paying attention to potted Christmas trees and pines. After the holidays, they can be transplanted into the ground and grown.
“When you buy a tree officially, you pay taxes that form the budget of your community and the entire country,” the state enterprise summarized.
Standing on the rooftop of a 16-storey residential apartment building in Ukraine’s capital Kyiv, Valerii Pyndyk pointed to several rows of solar panels.
Pyndyk hopes the installation – one of the first of its kind by residents in Kyiv – will help about 1,000 families living in the building get through what could prove Ukraine’s most difficult winter since the start of Russia’s invasion.
“The idea was born when we had electricity cut-offs in summer. We – the housing association board – realised that if we had blackouts in summer, then in winter they will not be shorter but longer,” said Pyndyk, 49, who heads the association.
The two previous winters of the war were already challenging, but Russia has now intensified its attacks on Ukraine’s energy infrastructure, with at least 11 major missile and drone strikes since March.
About half of Ukraine’s generating capacity was knocked out and distribution networks were also damaged.
In Kyiv, daily blackouts of eight hours are common and people plan their days around when power is scheduled to be available, including waiting in cafes for elevators to work if they live near the top of high-rise buildings.
Some residents and businesses have rushed to install new generating capacity in an attempt to access energy independently of the central energy system.
“Overall in Ukraine there is a steady trend towards energy independence, starting from small (consumer) clients and ending with business,” said Serhiy Kovalenko, CEO of Yasno, a leading energy supplier.
Analysts said strategies included more electricity imports from Ukraine’s Western neighbours, purchases of generators and alternative energy sources including solar panels, batteries and small gas turbine generators.
Yasno, which supplies electricity and gas to more than 3.5 million consumers and up to 100,000 businesses, provides options that include solar panels and accumulating batteries and inverters.
“Demand is very high,” Kovalenko told Reuters. “This autumn we installed up to eight megawatts, next year we will install up to 30-35 megawatts.”
Eight megawatts is enough to supply around a dozen enterprises in this case, the company said.
Russia has damaged or destroyed all of Ukraine’s thermal and hydropower plants.
In monetary terms, total damage to Ukraine’s energy sector exceeds $56 billion, including $16 billion in direct physical destruction and over $40 billion in indirect financial losses, according to estimates from the Kyiv School of Economics.
The country has to rely increasingly on nuclear generation, which makes it difficult to balance the amount of electricity on the grid, especially during peak morning and evening hours when retail consumption jumps.
Ukraine has tried to defend its energy system by building protective structures, setting up mobile drone-hunting groups and working with partners to bring in more air defence systems.
But it still lacks sufficient resources to protect facilities across the country.
After each Russian strike, the government, energy companies, engineers and Ukraine’s partners scramble to recover and rebuild what they can. Winter weather can complicate matters.
“If we have a cold winter, consumption will be much more than last winter. Last winter, maximum consumption was 18 gigawatts (GW), so this year we think that if it is cold… it will be 19 gigawatts,” said Olena Lapenko, general manager for energy security at a Kyiv-based think-tank, DIXI group.
Once the lights go off, the immediate fix for many is to turn on the generators.
“We need this electricity… to bake bread, to make croissants, cakes… We took a lot of steps to be ready – we bought powerful generators,” said Stanislav Zavertailo, co-owner of Honey confectioneries and Zavertailo pastry shops in Kyiv.
As his team refuelled an industrial generator at their production site, Zavertailo said electricity was driving up costs.
“One kilowatt-hour is five to six times more expensive than the usual one.”
Generators work better for small- and medium-sized enterprises and offer only a temporary solution, analysts said.
Looking for ways to help bigger businesses, the government agreed with Ukraine’s central European neighbours to increase imports to 2.1 GW at any given time from Dec. 1. But imports are also expensive, said Lapenko.
Dozens of financial programmes supported by Kyiv’s Western allies have been launched to shift Ukraine’s energy mix to a cleaner and more sustainable model. Legislative changes were also introduced to simplify equipment purchases and imports.
Solar panels have started to appear on roofs of private houses, residential buildings, schools, hospitals and other public buildings.
Pyndyk said the cost of the installation on his building was about 950,000 hryvnias ($23,000) and that the government and Kyiv municipality had offset about two-thirds of that amount.
He and his residents plan to install more panels on other buildings next year.
Official data showed that about 1.5 GW of new solar generation has been installed. But given Ukraine’s needs and the scale of wartime damage to energy infrastructure, such changes are only the beginning.
“This problem is not only a challenge for this winter. Coal generation is outdated and we need to change something,” said Lapenko of DIXI group.
“This is the prospect for three, four or five years to replace what was destroyed and gradually replace that outdated generation.”
