Growth of IT industry in 2019 will be 30%, according to Vice President for Strategy and Technologies at GlobalLogic Ukraine Andriy Yarorsky.
He told reporters at a conference in Lviv on Friday, September 27 that by the end of 2019, only the export of computer services will bring about $3.5 billion to the country’s economy. Having maintained such high growth rates, the export software development industry can grow to $4.5 billion by the end of 2020, Yavorsky said.
“On average, the IT industry grew by 20-25% annually. We expect more rapid growth this year thanks to favorable conditions on the international market and demand for the developments by Ukrainian specialists. According to our estimates, the market growth can reach 30% by the end of 2019. GlobalLogic’s revenue in Ukraine traditionally grows slightly faster than the industry – by 32% in the first half of 2019 – and we plan to maintain high growth rates until the end of the year,” he said.
Yavorsky said that according to the results of the first half of 2019, the export of computer services amounted to about $1.6 billion, which is 31% more than the same period in 2018. There is also an increase in the number of IT specialists: if according to market estimates as of the middle of 2018, there were about 130,000 specialists in the industry, then according to the IT Ukraine Association, there are currently more than 160,000 specialists in the market, which is 22% more than a year earlier. However, according to him, the industry still lacks qualified engineers.
According to Yavorsky, the amount of taxes paid by the IT industry in January-June 2019 increased 29% compared to the same period in 2018, to UAH 8 billion (companies and private individuals). GlobalLogic Ukraine paid 71% more taxes in the first half of 2019 than last year, he said.
GlobalLogic Ukraine is the largest software developer in Ukraine. It has offices in Kyiv, Kharkiv, Lviv, and Mykolaiv.
Official rates of banking metals from national bank as of September 30
One troy ounce=31.10 grams
National bank of Ukraine’s official rates as of 30/09/19
Source: National Bank of Ukraine
Poland has allocated more than $1 million to solve humanitarian problems in the annexed territories of Donbas this winter, the funds were transferred to the UN Office for the Coordination of Humanitarian Affairs, Poland’s mission to the UN in Geneva said on Twitter.
According to the UN, more than five million Ukrainians will survive the sixth winter in the context of the armed conflict in Donbas. The allocated money will be used to help the most vulnerable, in particular, the elderly and people with disabilities.
S&P Global Ratings has revised higher its projections for Ukraine’s real GDP growth in 2019 from 2.5% to 3.2%, and GDP will grow by an average of 3% annually over 2020-2022.
“Ukraine would have to attract more investment flows from abroad for a more meaningful and sustained pick-up in growth. In this context, the current government’s legislative efforts to effect land reform could lift growth over our current projections as could potential improvements in the business environment,” S&P said.
The analysts note investment is just 19% of 2018 GDP, down from the peak of 30% in 2007 prior to the global financial crisis. Another factor inhibiting economic growth is the weak banking sector lending. From 2014 to 2018, real credit growth to the private sector has contracted cumulatively by nearly 65%.
“While headline credit growth in 2017 and 2018 was positive, it was negative in real terms,” S&P said.
Risks to S&P growth projections include a slowdown in external demand for Ukraine’s key commodity exports and a flare-up of geopolitical tensions with Russia.
According to the projections, CPI (consumer price index) will fall from 11% last year to 8.8% this year, 7% next year, 6.5% in 2021 and 5.5% in 2022.
According to S&P analysts, the hryvnia exchange rate at the end of this year will be around UAH 27/$1, and in subsequent years it will gradually decrease and amount to UAH 27.50/$1 at the end of 2020, UAH 28/$1 at the end of 2021 and at the end of 2022 years – UAH 28.50 $1.
The current account deficit of the balance of payments after expanding this year to 2.8% of GDP in the next two years will expand to 3.2% of GDP, and in 2022 to 3.5% of GDP, S&P predicted.
The agency also expects a further gradual increase in reserves: from $20.33 billion last year to $21.49 billion this year, $22.18 billion next year, $22.95 billion in 2021 and $23.15 billion in 2022.
“While the immediacy of a fresh IMF program has receded, for instance compared to late last year, we would argue that such an arrangement serves to act as an important signal to investors while also facilitating access to funds from other IFIs [international financial institutions] at concessional rates. In this context, any backtracking on previously implemented reforms could potentially undermine Ukraine’s prospects in securing or maintaining on track any successive arrangement with the IMF. In the same vein, a settlement with the former owners of PrivatBank – which the state nationalized in 2016 at a cost of $5.5 billion (nearly 6% of 2016 GDP) – could potentially hurt relations with the IMF and other IFIs,” S&P said.
S&P projects general government debt to GDP will decline to below 50% in 2021 in both gross and net terms; S&P forecasts payouts from the government’s GDP warrants will be contained through 2022.
The European banks will provide EUR 900 million for overhaul of Kyiv-Odesa highway in Ukraine, said acting Chief of Ukravtodor Ukrainian Automobile Roads Agency Slawomir Nowak. “We managed to complete negotiations with the European banks, with EIB and BRD, and Ukraine will be granted the next 900 million euros for the overhaul of Kyiv-Odesa and assignment of an autobahn category to this road. From the next building season, they must begin repairs,” website of Hromadske media quotes Nowak as saying.
According to him, overhaul of Kyiv-Odesa highway will begin in 2020 and the highway is to become autoban after reconstruction. Three or four years needed for overhaul of this highway, Nowak said.
As reported, Nowak handed in resignation to Prime Minister of Ukraine Oleksiy Honcharuk following the termination of his three-year tenure.
