The macro forecast of the Ministry of Economy, which formed the basis of the draft state budget-2024, assumes a sharp improvement in the security situation from the second half of next year and, as one of the consequences, an acceleration of economic growth to 5% in 2024 and 7-7.5% in 2025-2026.
“Further economic development of Ukraine depends on the duration and active phase of military operations… Thanks to the military successes of Ukrainian defenders and protectors, a significant reduction of security risks is expected from the second half of 2024, which will positively affect the indicators of economic and social development of Ukraine for 2025-2026,” the document says.
According to the forecast, dated mid-June this year, inflation (at the end of the year) will fall to 10.8% next year, to 7% in 2025 and 5.8% in 2026.
Other estimates include unemployment falling from 18.8% this year to 10.8% in 2026.
In the formation of the revenue side is expected to increase revenues from the National Bank in 2025 to 103.9 billion UAH from 17.7 billion UAH in 2024 with a subsequent reduction to 15.4 billion UAH.
As reported, the government on Friday approved the draft state budget-2024 with revenues of UAH 1 trillion 746.3 billion, expenditures of UAH 3 trillion 108.2 billion and a marginal deficit of UAH 1 trillion 593.6 billion.
In relation to the current law on the state budget-2023, it is proposed to increase revenues by 25.6%, expenditures – by 7.6%, and reduce the deficit by 7.3%.
At the same time, this week the government submitted to the Rada a draft law No. 10038 with amendments to the state budget-2023 to increase its expenditures by 328.5 billion hryvnias due to the growth of internal loans by 207.6 billion hryvnias and external loans by 91.2 billion hryvnias.
Compared to it, revenues in the draft state budget-2024 are higher by 23.3%, or by 329.9 billion UAH, while expenditures are lower by 2.5%, or by 84 billion UAH, and the deficit – by 20.7%, or 416.8 billion UAH.
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The Slovak government has decided to extend the ban on imports of wheat, corn, rapeseed and sunflower seeds from Ukraine until the end of the year, Prime Minister Ludovit Odor has said.
“The European Commission did not extend the import ban on four products from Ukraine, including wheat, after September 15, so the government decided to ban their imports at the national level. And this is until the end of the year and on the same four commodities, i.e. wheat, corn, rapeseed and sunflower seeds. We have to prevent excessive pressure on the Slovak market to remain fair to domestic farmers,” Odor said, according to Aktuality.
According to him, the government’s move is also a reaction to a similar approach by Poland and Hungary. Odor emphasized that the Slovak government will continue to work intensively with the European Commission and European Union member states to find a pan-European and systemic solution while the national import ban on the four products is in place. He stated the government’s readiness to lift the ban in such a case.
The Slovak Ministry of Agriculture and Rural Development added that the decision is related to the protection of the domestic market and is a logical reaction to the practice of neighboring countries that adopt unilateral import bans.
“The ban does not apply to the transportation of goods through our territory, which expresses our solidarity with Ukraine and the placement of its goods on target markets,” the ministry added.
The National Bank of Ukraine’s (NBU) net sales of dollars in the second week of September jumped to $873.1 million from $302.3 million a week earlier, the highest level this year.
According to the NBU’s website, from September 11 to 15, its purchases of foreign currency fell to a meager $0.05 million, while sales jumped from $302.7 million to $873.1 million.
On the cash market, the dollar rose by 20 kopecks over the week, approaching the level of 38.2 UAH/$1. On Monday, Finance Minister Sergii Marchenko said that the draft state budget for 2024 includes an average annual exchange rate of 41.4 UAH/$1.
As reported, in August, the volume of the National Bank’s interventions increased to $2.364 billion from $1.933 billion in July and $1.798 million in June. At the same time, the volume of external financing in August decreased to $1.664 billion, so international reserves decreased by 3.2% to $40.387 billion from a record high of $41.72 billion.
In total, since the beginning of this year, the NBU has purchased $195.9 million in the market, while selling $18 billion 21.8 million.
More than 35 thousand pilgrims arrived in Uman (Cherkasy region) to celebrate Rosh Hashanah, and no emergencies occurred, said Ivan Vygovsky, head of the National Police of Ukraine.
“Despite the increased risks and the large number of arrivals, law enforcement officers are keeping the situation under control, no emergencies have occurred,” Vygovsky said in a statement on the National Police telegram channel following his visit to Uman.
As noted, the police are working in an enhanced mode, three filtration points with baggage scanners, stationary posts, a visa support point, control and inspection groups have been organized, and the number of investigative teams has been increased.
A coordination headquarters consisting of representatives of the National Police, the National Guard, the State Emergency Service, the State Migration Service and other services is working around the clock.
“Police officers from the State of Israel are also on duty with our police officers, who arrived to strengthen security measures and help tourists,” the National Police said.
In 2023, Rosh Hashanah (Jewish New Year) is celebrated from September 15 to 17.
JSC “Ukrzaliznytsia” (UZ) in January-August transported 10.5% less cargo than in the same period last year – 94.9 million tons, deputy director of the department of commercial work of “UZ” Valery Tkachev said at a meeting of the Export Office on Wednesday.
At the same time in August the volume of transportation amounted to 12.3 million tons, which is 13.8% more than in August last year.
Tkachev noted that the said reduction in the volume of cargo transportation for the first eight months of this year was mainly due to a decrease in the volume of their transportation in the export direction: in January-August it decreased by 14.8% compared to the same period last year, to 34.8 million tons.
“The situation with transportation in the export direction is not very good. Last month we transported only 3.3 million tons of cargo in export traffic. The reason is the closure of the “grain corridor” and the introduction of restrictions on the western border regarding the acceptance of grain. Therefore, unfortunately, our export transportation has decreased. The best indicator was in September (2022), when we transported 5.2 million tons in export traffic. But now, due to the decline in grain transportation, we have the current indicators,” Tkachev said during the meeting.
According to him, as a result of the decline in grain cargo exports, there have been changes in the structure of transportation – iron ore has taken the first place.
“The first place in transportation in export traffic is occupied by iron and manganese ore – 42% of the total volume. Grain takes the second position – 27%, in the third place ferrous metals – 11%”, – said the deputy director of the department of commercial work of “UZ”.
Thus, in January-August the volume of ore transportation amounted to 11.49 million tons, which is 38.3% less compared to the same period last year. The volume of ferrous metals transportation in export traffic decreased by 29.7%, to 3.03 million tons, oil increased by 21%, to 826 thousand tons, building materials fell by 47.5%, to 1.036 million tons, cement increased by 37.4%, to 791 thousand tons.
The volume of grain cargo exports in August amounted to 876 thousand tons, which is 8.8% more than in July. Of this volume, 358 thousand tons of corn, 225 thousand tons of wheat, 235 thousand tons of industrial seeds and 58 thousand tons of other seeds were transported. In the direction of sea ports 143 thousand tons were transported, through land border crossings 733 thousand tons, which is 8.8% more than in July.
For eight months, the volume of grain transportation amounted to 14.75 million tons, which is 27.6% more compared to the same period last year. “Since June 29, the work of the Grain Corridor has been completely blocked. Massive strikes carried out by the aggressor in July-August on the Odessa region resulted in damage to the infrastructure of international and Ukrainian traders in Odessa and Danube ports. “In addition, since May 2, the European Commission has banned the supply of wheat, corn, rapeseed and sunflower seeds from Ukraine to five countries – Bulgaria, Hungary, Poland, Romania and Slovakia – until September 15, 2023,” UZ points out.
“It is pleasing that the volume of grain transportation in the direction of western land crossings began to grow. Already up to 500 railcars per day we transfer to the western BCPs. Let me remind you that in the best times we used to transfer 680 wagons per day and transported 1 million tons of grain across the western borders per month. After the restrictions, the volumes fell to 370-400 cars and 0.5 million tons of grain. Now the situation is normalizing,” – said Tkachev.
It is noted that the cargo flow through land crossings at the end of August amounted to 2.83 million tons, or 86% of the total export traffic by rail. Mostly cargoes went through Chop – 684 thousand tons, Uzhgorod – 396 thousand tons, Batievo – 241 thousand tons, Vadul-Siret – 206 thousand tons, Yagodin – 163 thousand tons. Seaports handled 476 thousand tons of cargo in August, or 14% of the total volume transported by UZ.
In “UZ” also specified that following the results of August seaports handled 476 thousand tons of cargoes, or 14% of the total volume of transportation by rail in the export direction. Of this volume, only Izmail ICC processed 433 thousand tons of cargo.
As of June this year, the share of illegal tobacco products in the total market in Ukraine amounted to 19.5%, slightly down from 20.2% in February, but the share of Duty Free labeled products even slightly increased to 10.9% from 10.8%, according to the latest study “Monitoring of the Illegal Trade in Tobacco Products in Ukraine” by Kantar Ukraine.
According to Kantar’s preliminary estimates, presented this week at a roundtable organized by the American Chamber of Commerce with the participation of representatives of the US and Japanese embassies, government officials, the Ukrtyutyun Association and business, the losses of the state budget in 2023 from the illegal tobacco market are estimated at more than UAH 21 billion.
It was noted that the share of counterfeit products remained significant in June – 6.9%, while in February it was estimated at 7.9%.
At the roundtable, KPMG also presented its research on the markets for illegal tobacco products in Ukraine, the EU, the UK, Norway, Switzerland and Moldova in 2022. According to the report, Ukraine is the second largest market for the consumption of illegal tobacco products in Europe, and budget losses amounted to almost UAH 26 billion.
The roundtable participants called for intensifying efforts to combat the illegal production and trafficking of tobacco products and establishing coordination between the competent authorities. In particular, as noted in the release of the American Chamber of Commerce, it is important to adopt the necessary amendments to the legislation on criminalization of tobacco smuggling, improve mechanisms for prosecution for actions related to the illegal production and trafficking of cigarettes, and create an effective system of control over the storage and destruction of confiscated products and equipment.
It is specified that the event was attended by the member companies of the Chamber’s special platform on hard excisable goods, which in 2022 paid over UAH 78 billion in taxes: “Philip Morris Ukraine, V.A.T.-Pryluky, J.T. International Company Ukraine, and Imperial Tobacco Ukraine.
As reported, in June 2020, Kantar estimated the share of the illegal tobacco market at only 5%, but by August 2022, it reached 21.9%. At the same time, smuggling decreased from 3% to 1.8%, while counterfeit products increased from 1% to 8%, and duty-free labeled products from 2% to 12.2%.
