The growth of Ukraine’s gross domestic product (GDP) in the second quarter of 2018 slightly accelerated, to 3.2% from 3.1% in the first quarter, the National Bank of Ukraine said in the July inflation report. “In Q2, 2018, Ukraine’s economy kept growing. The high business expectations of companies were evidence of sustained growth in investment activity. The further increase in personal income fueled consumer demand. Overall, real GDP growth in Q2, 2018 is estimated at 3.2% year-on-year,” reads a report on the central bank’s website.
The steady rise in consumer demand was propelled by stronger household income (wages, pensions, remittances). The latter supported the high growth rates of retail turnover, the NBU said.
“As in Q1, the disruption of ties with the non-controlled territories last year had an impact on the pace of economic growth. As a result, gross value added in the metallurgy, mining industry, and energy sector kept growing despite being held back somewhat by repairs at several large enterprises of the mining industry and metallurgy,” the report says.
As reported, a week earlier the National Bank confirmed the forecast for Ukraine’s GDP growth in 2018 and 2020 at 3.4% and 2.9% respectively, but worsened expectations for 2019 from 2.9% to 2.5%.
In the inflation report, the NBU also confirmed the inflation forecast for the current year at 8.9%, but improved the forecast for underlying inflation to 7.1%.
The growth of Ukraine’s economy in 2017 accelerated to 2.5% from 2.3% a year earlier with the increase in inflation to 13.7% from 12.4%.
The European Bank for Reconstruction and Development (EBRD) will issue a long-term loan of up to $20 million to Astarta, a Ukrainian agro-industrial holding, to finance working capital necessary for plant growing, sugar beets and soybeans processing. EBRD Senior Adviser on External Relations Anton Usov told Interfax-Ukraine the board of directors made a corresponding decision at a meeting on July 18.
The bank says its funding will also contribute to improving efficiency and productivity through the introduction of modern IT solutions and farming practices and support of stronger ties with local suppliers.
According to information on the EBRD’s website, the overall valuation of the project is estimated at $242 million.
As reported, the EBRD in October 2017 issued a $25 million loan to Astarta for seven years for the construction and purchase of sugar and grain storage facilities.
Astarta is a vertically integrated agro-industrial holding that operates in eight regions of Ukraine. The holding includes eight sugar factories, agricultural enterprises with a land bank of about 250,000 hectares and dairy farms.
Exports of grain crops in the 2017/2018 marketing year (July 2017 through June 2018) totaled 39.4 million tonnes and amounted to $6.4 billion, according to the State Fiscal Service of Ukraine. The largest buyers of Ukrainian grain in this period were Egypt ($ 724 million, with a share of 11.4%), China ($594 million, 9.3%), Spain ($459 million, 7.2%), Indonesia ($375 million, 5.9%) and the Netherlands ($348 million, 5.5%).
In particular, Ukraine exported 17.8 million tonnes of maize worth $2.86 billion (China’s share was 16.4%, Egypt accounted for 13.6%, and the Netherlands for 12.2%). Exports of wheat totaled 17.2 million tonnes worth $2.83 billion (Indonesia with 13.3%, Egypt with 11.8%, and Bangladesh with8.7%); while exports of barley stood at 4.3 million tonnes worth $0.64 billion (Saudi Arabia with 41.2%, China with 19.3%, and Libya with 6.6%).
As noted, 99% of all grain was shipped by sea (39 million tonnes). The ports of Chornomorsk (formerly Illichivsk) accounted for 22% of all grain shipments by sea, the port of Odesa accounted for 19%, Yuzhny for 19%, and Mykolaiv for 18%. At the same time, 306,000 tonnes (0.8%) was exported by rail and almost 80,000 tonnes (0.2%) by road.
Ukraine in the 2016/2017 marketing year exported 43.8 million tonnes of grain, the Ukrainian Ministry of Agrarian Policy and Food earlier reported.
Ukraine’s retail trade in January-June 2018 increased by 6.2% in comparable prices compared to January-June 2017, the State Statistics Service said on Friday. In June 2018 alone, retail trade decreased by 0.8% compared to May 2018, but it grew by 6.3% compared to June 2017.
The highest growth in retail trade in January-June of 2018 was recorded in the following regions: Luhansk (24.0%), Poltava (10.4%), Donetsk (10.3%), Zakarpattia (10.2%), Vinnytsia (9.9%), Kyiv (9.3%) and Ternopil (8.4%) regions. The State Statistics Service recalls that the report does not include information from temporarily occupied areas of the Autonomous Republic of Crimea and the city of Sevastopol and part of Russian-occupied Donbas in the east of Ukraine.
DONETSK REGION, HIGHEST GROWTH, LUHANSK, POLTAVA, RETAIL TRADE
The assets of the National Bank of Ukraine (NBU) as of July 1, 2018, amounted to UAH 942.724 billion, which was 8.2% less than at the beginning of the year.
Such financial indicators were published by the central bank in the parliamentary edition Holos Ukrayiny (the Voice of Ukraine) on Friday, July 20.
The amount of non-resident securities, which are part of the NBU’s assets, shrank most noticeably: by 10.1%, to UAH 372.725 billion, while holdings and special drawing rights (SDR) decreased by about 61%, to UAH 23.807 billion.
At the same time, the amount of funds and deposits in foreign currency and banking metals almost doubled, to UAH 49.806 billion.
In the structure of the NBU’s liabilities, the amount of obligations to transfer profits to the budget, fell by 85.2%, to UAH 6.614 billion, the amount of assets of government and other institutions fell by over 54.7%, to UAH 25.135 billion, while the liabilities of the National Bank before the International Monetary Fund shrank by 12.4%, to UAH 180.660 billion.
The European Bank for Reconstruction and Development (EBRD) has approved a new program USELF III (Ukraine Sustainable Energy Lending Facility) worth EUR 250 million to support private projects in renewable energy in Ukraine. EBRD Senior Adviser for External Relations Anton Usov told Interfax-Ukraine the board of directors made the corresponding decision at a meeting on July 18. The bank said it has been supporting the development of renewable energy in Ukraine within the framework of the USELF program since 2009, but it expires on June 30, 2018, and USELF III should replace it.
During the first program, the bank financed projects for total of more than EUR 100 million to fund projects with a total capacity of over 150 MW of various renewable energy technologies, the document says. The EBRD notes that as a result of the development of the renewable energy sector, interest from large international developers is growing, and they are ready to implement larger projects in the field of renewable energy.
The bank also says that despite the significant growth of the sector in Ukraine, its share remains insignificant at 1.5%, while the National Action Plan for Renewable Energy envisages the increase of this share to 11% by 2020.
