The article collects and analyzes the main macroeconomic indicators of Ukraine. In connection with the entry into force of the Law of Ukraine “On Protection of the Interests of Economic Entities during Martial Law or State of War” the State Statistics Service of Ukraine suspends the publication of statistical information for the period of martial law, as well as for three months from the date of its completion. The exception is the publication of information about the consumer price index, separate information on statistical indicators of 2021 and for the period January-February 2022. The article analyzes open data from the State Statistics Committee, the National Bank and analytical centers.
Maxim Urakin, PhD in Economics, analyzed macroeconomic trends in Ukraine and the world based on official data from the State Statistics Committee of Ukraine, the NBU, the UN, the IMF and the World Bank.
Macroeconomic Indicators of Ukraine
Maxim Urakin cited data from Ella Libanova, director of the Institute of Demography and Social Research, which suggests that about 50% of citizens will return after the war.
“Demography is an important factor for economic recovery, but the threat of depopulation and labor shortage cannot be ignored. In the medium term, the reduction of demographic growth potential in Ukraine is compensated only by migration,” Urakin emphasized.
The expert noted that the main risks for the economy remains the duration of the war and instability of international aid.
“In the third quarter of 2023, Ukraine’s GDP growth slowed to 8.2%. The negative balance of foreign trade increased by 3.2 times, which is a worrying signal. Public debt has slightly decreased compared to August figures, but in 2024 it may exceed the country’s GDP for the first time, which poses significant risks to economic stability,” the economist said.
Prospects for the Global Economy
Maxim Urakin also analyzed the global economy, noting a slowdown in growth in 2024 to 2.2%.
“One of the key reasons for the slowdown in global economic growth is the decline in GDP rates in developed countries. We have seen the lowest GDP upturn in advanced economies since the 1980s, excluding the periods of the global financial crisis and the COVID-19 pandemic. The unprecedented cycle of interest rate hikes by major central banks in recent years has also played a significant role in slowing growth. This increase in rates is caused by the need to control inflation, but at the same time it limits economic activity,” the expert explains.
According to the expert, the current macroeconomic situation in Ukraine and the world requires further analysis. For Ukraine, the main challenges in the coming years will be the need to rebuild Ukraine after the war and the management of public debt.
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Wheat flour prices in Ukraine have been gradually falling since the beginning of March due to problems with transit through Poland, where striking farmers are constantly blocking the borders, APK-Inform news agency reported.
“Excessive supply of flour and moderate demand from both domestic and export-oriented companies continue to put pressure on prices. It is almost impossible to sell the flour to the export market due to the strikes at the Polish borders, which also affects the gradual decline in prices,” the analysts said.
According to their information, since the beginning of the month, the prices for high-grade flour have decreased by 100-300 UAH/ton and as of March 15 are mainly fixed in the range of 9700-11100 UAH/tonEXW.
Number of dead and wounded civilians in Ukraine from 24.02.2022 till 31.12.2023 un data
Source: Open4Business.com.ua and experts.news
The total area of residential buildings for which construction permits were issued (new construction) decreased by 37% in 2023 compared to 2022, to 4.2 million square meters, the State Statistics Service (Ukrstat) reported.
According to the statistics agency, in January-December 2023, the total area of new construction of apartment buildings decreased by 38.2% year-on-year to 4 million 33.6 thousand square meters, while the area of single-family houses increased by 26.5% to 164.5 thousand square meters. The number of apartments in apartment buildings declared for construction decreased by 1.8 times and amounted to 46.2 thousand square meters.
In Kyiv in 2023, the total area of new housing construction decreased by 66% compared to 2022, to 299.4 thousand square meters, and in Kyiv region – by 67%, to 616.1 thousand square meters.
According to the State Statistics Service, new construction in Lviv region decreased by 14% year-on-year to 870.3 thousand square meters, and in Khmelnytsky region by 5.3% to 313.1 thousand square meters.
At the same time, in Ivano-Frankivsk region, the volume of new construction in 2023 amounted to 469 thousand square meters, which is 2.3 times higher than the previous year. The increase in volumes was also recorded in Chernivtsi region – “plus” 275.4%, up to 225.4 thousand square meters, Zakarpattia region – “plus” 79.3%, up to 256 thousand square meters, Vinnytsia region – “plus” 77.4%, up to 230.6 thousand square meters.
In other regions of Ukraine, the volume of new construction last year showed a drop compared to the previous year and amounted to less than 200 thousand square meters.
The State Statistics Service reminds that the figures are given without taking into account the territories temporarily occupied by the Russian Federation and part of the territories where hostilities are ongoing (or have been ongoing).
As reported, the total area of new housing construction in 2022 amounted to 6.67 million square meters, in 2021 – 12.7 million square meters.
“As of March 2024, Kernel, one of the largest Ukrainian agro-industrial groups, has returned to pre-war volumes of agricultural exports by sea, said Yuriy Kizlevych, Head of the Transshipment and Fleet Department of the agricultural holding, during the online conference of the Center for Economic Strategies “Challenges at Sea and Border. What is the future of Ukraine’s foreign trade?”.
“We are investing in infrastructure. As of today, we have really returned to pre-war export volumes. During the full-scale invasion, we continued to invest in port terminals. We now own a certain cluster of terminals, both for grain and vegetable oil transshipment,” he said.
According to Mr. Kizlevych, Kernel handles not only its own agricultural products but also provides this service to other operators, which has a positive impact on the domestic market and exports.
The head of Kernel’s transshipment and fleet department noted that the agricultural holding sees prospects for increasing exports via the Black Sea sea corridor.
He also said that 70% of Kernel’s exports are to non-European destinations, including Asia, the Middle East, North Africa, and only then to Western Europe.
Speaking about the cost of logistics, Kizlevych stated that since the beginning of the war, it has had to be divided into two components: domestic and maritime. All domestic market operators have problems with the former, in particular with regard to facilities where infrastructure has been damaged.
“However, thanks to the fruitful cooperation between business and the state, we see that the best ways to solve problematic infrastructure issues are being found. Inland logistics is changing very dynamically, taking into account the existing export channels. We see that this process has become more planned and manageable, comparable to the pre-war level,” he said.
Describing Ukraine’s maritime logistics, Kizlevych confirmed the impact of the military bonus factor on the total cost of export transportation.
“Of course, there is a factor of the military premium that must be paid to shipowners for the call of ships (to the Ukrainian part of the Black Sea – IF-U). Fleet freight has become more expensive. If we look at the “grain corridor”, its first Ukrainian version, we can state huge losses in port dues for the downtime of the large-capacity fleet. These are millions, tens of millions of losses,” said the Head of Transshipment and Fleet Department of Kernel.
At the same time, he emphasized that market participants see positive dynamics in the reduction of insurance rates, which is a positive signal and gives hope for a more stable functioning of Ukraine’s sea routes in 2024.
Before the war, Kernel Agro Holding was the world’s largest producer of sunflower oil (approximately 7% of global production) and a major exporter (approximately 12%). It is one of the largest producers and sellers of bottled oil in Ukraine. In addition, it is engaged in the cultivation and sale of agricultural products.
Kernel’s net profit for FY2023 amounted to $299 million, while the company ended the previous year with a net loss of $41 million. The agricultural holding’s revenue for FY2023 decreased by 35% to $3.455 billion, but EBITDA increased 2.5 times to $544 million.
