Ukraine’s state budget on Friday received a CAD$2.4 billion (about $1.8 billion) loan from Canada on favorable terms under a second supplementary agreement, the Ukrainian Finance Ministry said.
“Canada has once again demonstrated that it is a reliable partner of Ukraine: today we received CAD2.4 billion, which will be used primarily to finance priority state budget expenditures,” Finance Minister Serhiy Marchenko said in a statement.
The Ministry of Finance specified that the additional credit was granted for 10 years with the interest rate of 1.5% per annum. The funds are provided through the mechanism of the IMF administrative account.
As reported, the external needs in financing the state budget of Ukraine in 2023 amount to about $ 38 billion, and after the recent increase of expenditures by 537 billion UAH they are estimated already at $ 42.5 billion.
According to the Ministry of Finance, by March 29, financing from international partners had already reached $9.17 billion by the beginning of this year, compared to $32.14 billion for the whole of last year. That includes $3.5 billion in grants from the U.S. this year, $4.85 billion in loans from the EU and another $495 million in loans and guarantees from Britain.
Domestic funding from government bonds this year amounted to $3.43 billion.
The International Monetary Fund’s four-year extended EFF financing program for Ukraine also envisions the country receiving $80 billion from multilateral and bilateral donors during this period, including $20 billion in grants and $60 billion in concessional loans, as well as another $20 billion in debt flow relief, said Gavin Gray, head of the Fund mission.
At a press conference on Friday, after announcing the decision to approve the $15.6 billion EFF program, he recalled two announcements made last week: from a group of official Ukrainian creditors about their willingness to defer the country’s debt payments for the program period and about Ukraine’s intention to agree the same with the holders of Eurobonds and other external commercial debts.
Insurance company “Busin” (Kyiv) in 2022 collected 328.124 million UAH of gross premiums, which is 48.13% less than a year earlier, according to rating agency “Standard-Rating” in information about updated credit rating/ financial stability rating of the insurer at the level “uaAA+” on national scale based on analysis of its statements for this period.
It is noted that the receipts from individuals for this period have decreased by 49,53% to UAH 1,349 mln, and from reinsurers, on the contrary, have increased in 4,34 times to UAH 46,629 mln.
Insurance payments, sent to the reinsurers, in 2022 compared to 2021 decreased by 60,69% – down to 217,001 million UAH. As a result, the participation rate of reinsurers in insurance premiums decreased to 66,13%.
Net premiums have grown by 37,84% – up to 111,123 million UAH, and earned premiums – by 3,29%, up to 87,465 million UAH.
In four quarters of 2022 the company has paid out UAH 0,687 mln of indemnities to its customers, which is by 98,44% less than in 2021. Thus, the indemnities rate has decreased on 6,73 p.p. – up to 0,21%.
The financial result from operating activities of IC “Busin” has increased by 13,80% in 2022 in comparison with 2021 up to UAH 44,676 mln, and net profit – almost in 5,5 times, up to UAH 62,413 mln.
Assets of the insurer have decreased by 5,26% down to UAH 611,636 mln on December 31, 2022, shareholders’ equity has increased by 33,39% – up to UAH 201,031 mln, liabilities have decreased by 17,03% – down to UAH 410,605 mln, cash and cash equivalents have increased by 21,05% – up to UAH 211,065 mln.
IC Busin was incorporated in February, 1993. It specializes on risk kinds of insurance. It is a member of several professional and industry associations – League of Insurance Organizations of Ukraine, National Insurance Indemnity Club, International Association of Aviation Insurers (UA), Nuclear Insurance Pool, American Chamber in Ukraine, British Business Club.
The board of directors of the International Monetary Fund (IMF) on Friday approved a four-year, SDR11.6 billion ($15.6 billion) extended EFF program as part of a total support package for Ukraine of $115 billion, the Fund said in a statement.
“The Ukraine program (for 2023-2027), supported by the EFF, aims to anchor policies to maintain fiscal, external, price and financial stability and support economic recovery, while improving governance and strengthening institutions to promote long-term growth in the context of post-war recovery and Ukraine’s path to the EU,” the IMF said.
The Fund specified that the decision of the board of directors allows for immediate disbursement of about SDR2 billion (or $2.7 billion).
IMF mission chief Gavin Gray clarified to reporters that the first review of the program is expected in June-July this year, the second by the end of October, possibly in early November, and from 2024 will be quarterly.
According to the release, EFF approval is expected to attract large-scale concessional financing from international donors and Ukraine’s partners to help resolve Ukraine’s balance of payments problem, achieve medium-term external viability and restore debt sustainability on a prospective basis in both baseline and negative scenarios.
The IMF notes that in view of the exceptionally high uncertainty faced by Ukraine, the EFF program envisages a two-stage approach. In the first phase of the program, scheduled for 2023-2024, the focus will be on three goals. These include, among others, strengthening the 2023 budget and supporting revenue mobilization, including by avoiding new measures that could undermine tax revenues.
In addition, it is about sustainable disinflation and exchange rate stability, including by maintaining sufficient foreign exchange reserves, and promoting long-term financial stability, including by preparing a more in-depth assessment of the banking sector and further strengthening the independence of the central bank.
“Independent and effective anti-corruption institutions will help reduce corruption risks during martial law and build public and donor confidence in future reconstruction,” the Fund adds.
He also noted that the first phase of the program will protect social spending.
“The second phase of the program will shift the focus to more ambitious structural reforms to strengthen macroeconomic stability, support early post-war recovery, and enhance resilience and higher long-term growth, including in the context of Ukraine’s EU accession goals,” the IMF pointed out.
According to the release, Ukraine is expected to return to its pre-war policy fundamentals, mainly a flexible exchange rate and inflation targeting, while improving productivity and competitiveness, strengthening institutions and addressing financial and energy sector vulnerabilities.
In addition, fiscal policy will focus on critical structural reforms to guarantee medium-term revenues by implementing a national revenue strategy, along with improving public financial management and introducing public investment management reforms to support postwar recovery.
“The risks to the EFF program are exceptionally high. The success of the program depends on the size, composition and timing of concessional external financing to help close the budget deficit and external financing and restore debt sustainability on a forward-looking basis under baseline and negative scenarios,” said First Deputy Managing Director Gita Gopinath.
IMF Chief of Mission Gavin Gray specified that besides $15.6 billion from the Fund, the support package implies $80 billion from multilateral and bilateral donors, of which $20 billion in grants and $60 billion in concessional loans, as well as another $20 billion in deferred external debt payments.
According to him, the baseline scenario assumes the completion (winding down) of the war in mid-2024, while the negative scenario – by the end of 2025 with an increase in financing needs up to $240 billion.
At the same time, the IMF representative stressed that the program provides additional guarantees from a number of shareholders of the Fund, as preferred creditors, in particular the G7 countries, Belgium, Lithuania, the Netherlands, Poland, Slovakia and Spain.
Ukrainian President Volodymyr Zelensky reported about the hour-long conversation with his French counterpart Emmanuel Macron.
“In an hour-long conversation with Emmanuel Macron we substantially and effectively discussed the defense cooperation between Ukraine and France. Informed in detail about the situation on the front. We dwelled on the further steps for the implementation of the Peace Formula. Coordinated actions in the context of the nearest international events”, – reported in Telegram channel Zelensky on Saturday.
Leaders of five Central and Eastern European countries have urged the European Commission to take action in connection with a surplus of grain and other Ukrainian food on their territory, the Associated Press reported from Warsaw.
“We call on the European Commission to study the possibility of buying accumulated grain from EU member states bordering Ukraine for humanitarian needs,” reads a letter addressed to EC President Ursula von der Leyen on behalf of the prime ministers of Poland, Slovakia, Hungary, Romania and Bulgaria.
“We also reiterate our call for financial support from the EU to accelerate the development of transport infrastructure (for the export of grain – IF),” it says.
It is pointed out that such products remain on the shelves of these countries in excess, reducing prices, and do not reach the countries that are ready to buy them outside the EU.
The European Commission earlier said that it intended to quickly launch an assistance mechanism for countries that faced an influx of Ukrainian products.
