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.
Agro-Region (Velyka Oleksandrivka, Boryspil region in Kyiv region) plans to buy farmland with the opening of the land market in Ukraine, Agro-Region CEO Kateryna Rybachenko has said. “We, of course, plan to buy land with the opening of the market. The huge problem was that we could not invest in irrigation if the land did not belong to us. If people want to sell the land, we will be the first in line who will offer to buy it,” she told Interfax-Ukraine.
According to Rybachenko, now the company pays an average of $150 rent per hectare.
“We annually invest at least $100 per hectare in new equipment. The plans for the next year, in addition to investing in equipment, are to send funds to buy land if someone has a desire to sell it,” the CEO said.
At the same time, she said that there were no plans to increase the land bank, however, Agro-Region considers it necessary to invest in updating existing assets and ongoing projects.
Agro-Region was founded in 2002. It processes 38,000 hectares in Khmelnytsky, Zhytomyr, Chernihiv and Kyiv regions. The company annually produces 240,000 tonnes of grain and oilseeds. It has two silos in Boryspil and Myropil with a total storage capacity of 150,000 tonnes.
Chairman of the Verkhovna Rada committee for energy and utilities Andriy Herus has initiated the abolishment of the provision to exempt taxpayers from paying value added tax (VAT) on imported equipment for solar power plants and wind farms.
“This is an absolutely unacceptable situation when importers receive preferential VAT, do not pay it to the national budget, and Ukrainian producers are forced to pay VAT under the worst conditions… From Monday [September 30] I will register the corresponding bill in order to cancel this equipment import privilege as quickly as possible,” he said during a meeting on legislative regulation of state support for the development of renewable energy projects in Kyiv on Friday.
As reported, at the end of 2018, the Verkhovna Rada introduced amendments to the Tax Code, which exempted taxpayers from paying VAT on imported equipment for solar power plants and wind farms.
EQUIPMENT SOLAR POWER PLANTS, IMPORT, PARLIAMENT, VAT, WIND FARMS
