The International Monetary Fund (IMF) has worsened its forecast for real gross domestic product (GDP) growth for this year from 3-4% to 2.5-3.5% at the end of the fourth review of the EFF extended financing program, while improving its year-end inflation forecast from 8.5% to 8%.
“We are now seeing clear signs of a slowdown in growth due to deteriorating sentiment as military action develops and also due to power outages,” Gavin Gray, head of the International Monetary Fund (IMF) mission to Ukraine, said at a press conference on Friday evening after Ukraine’s tranche was disbursed.
Risks remain exceptionally high, he said, especially due to uncertainties related to the war and external financing.
According to a publication on the Fund’s website, for next year, expectations for Ukrainian economic growth have been worsened to 5.5% from 6.5%, while maintaining the inflation estimate of 7%.
The IMF also lowered its forecast of Ukraine’s nominal GDP for this year to UAH 7.49 trillion from UAH 7.75 trillion in its March review, and for next year to UAH 8.74 trillion from UAH 8.87 trillion.
In terms of GDP composition, the IMF slightly worsened expectations for net exports, while expecting a larger contribution from domestic demand, private consumption and investment compared to the March revision.
The Fund improved the inflation forecast for the end of this year to 8% from 8.5%, maintaining its expectations for its slowdown to 7%, 5.5% and 5% in 2025-2027, but lowered expectations for real income growth this year and next year: by 1.2 p.p. to 8.6% and by 1 p.p., respectively. – to 8.6% and by 1 p.p. to 6.8%. – to 6.8%.
Also, the fourth revision slightly worsened the unemployment estimate: to 14.8% from 14.5% this year and to 14.3% instead of 13.8% next year.
As for the budget, the IMF has increased the estimate of its deficit (excluding grants) – to 20.9% of GDP from 20.2% of GDP for this year, to 10.4% of GDP from 10.3% of GDP for 2025.
According to the document, expectations for external financing have been improved to 12.1% of GDP from 11.8% of GDP and domestic financing to 2.1% of GDP from 2% of GDP, which should be provided by banks, while the estimate of external financing for next year remained at 6.5% of GDP, domestic – 0.9% of GDP with a reduction in the participation of banks to 0.5% of GDP.
As reported, last year the Ukrainian economy, according to the State Statistics Committee, grew by 5.3% after falling by 28.8% a year earlier, and in the first quarter of this year growth amounted to 6.5%.
On April 25 this year, the NBU worsened the country’s GDP growth forecast for this year from 3.6% to 3%.
The government, when approving the draft state budget for the second reading in early November 2023, projected economic growth this year at 4.6%, but the Finance Ministry recently said it had been worsened to 3.5%, and First Deputy Prime Minister Yulia Sviridenko said in mid-June in Berlin that the forecast had been worsened to less than 4%.
Last week, a Boeing 737-800 from the fleet of Supernova Airlines of the NOVA group of companies (Nova Poshta) made a maintenance flight from Guangzhou (China) to Vilnius (Lithuania) with a technical stop at Tashkent airport.
This was reported by Vyacheslav Klimov, co-founder of Nova Poshta, on the sidelines of an entrepreneurs’ forum organized by Forbes Ukraine in Kyiv on Thursday.
“The airplane made a maintenance flight. It did not carry cargo and this flight should not be considered as a full-fledged start of commercial activity of SuperNova Airlines,” Klimov said.
He emphasized that the airline is preparing to launch commercial cargo flights, but preparation is a complex process that takes time. Klimov did not specify when this would happen, but he did not rule out that it would be by the end of the year.
Earlier it was reported that Supernova Airlines opened the first route from Riga to Rzeszow in cooperation with the Latvian airline RAF-Avia using its ATR 72 aircraft.
The company clarified that the use of air transportation saves up to 36 hours on the delivery of parcels from (or to) Riga compared to trucks. It was also reported that Supernova Airlines plans to form a fleet in the future with cargo versions of modern aircraft manufactured by Boeing or Airbus.
As reported, on January 6, 2023, Supernova Airlines received a Ukrainian operator’s certificate, which allows it to start cargo flights.
Metinvest Mining and Metallurgical Group has spent $209 mln to support Ukraine and its citizens since the beginning of the full-scale war, of which 57% for the army within the framework of Rinat Akhmetov’s Steel Front militarized initiative, 23% for employee assistance, 17% for humanitarian and other projects, and 4% for medical assistance.
According to Metinvest’s presentation at the Barclays ESG Emerging Markets Corporate Day, dated June 26 of this year, the group provided protective equipment to the personnel of the Ukrainian Armed Forces, the National Guard, the National Defense Forces and the National Police in support of the military.
At the same time 370 mobile shelters, 150 thousand bulletproof vests, most of which are made with Metinvest armored steel plate, 25 thousand helmets, 2000 thermal imagers and other equipment were purchased and sent to the military. The company manufactured and supplied the defenders of Ukraine with 250 fake military equipment targets, 80 thousand anti-tank hedgehogs and spiked chains, 70 mobile buggies and 5,000 field ovens.
More than 4,900 reconnaissance drones were also sent to the military. To protect Ukraine on the water, the group donated 10 high-speed boats and 800 self-inflating life jackets.
Metinvest’s Ukrainian assets donated 520 vehicles, 100 ambulances and 1.4 million liters of fuel to the front lines. The group also invested in the construction of a mine action center to train specialists in demining areas after combat operations.
As part of humanitarian and other projects, Metinvest, together with other SCM companies and with the assistance of the Rinat Akhmetov Foundation, in particular, created and finances the “Saving Life” humanitarian aid center with the provision of food and other essentials.
As part of medical aid, the company supplies vital medicines, equipment and consumables to local hospitals. The Group financed the development of medical services and reconstruction of hospitals. Together with the Puls charitable foundation, the group promotes the development of tactical medicine.
Social projects include supporting its employees and their families by providing psychological services, introducing an additional bonus for employees, and developing a program for veterans of the AFU. In 2023, the group’s workforce decreased by 7% year-on-year, with about 6,000 employees serving in the defense forces at the end of last year.
Amid the war, the group has focused on improving safety at work – health and safety expenditure increased by 16% in 2023 compared to 2022.
“Metinvest is a vertically integrated group of mining and metallurgical companies. The group’s enterprises are located primarily in Donetsk, Luhansk, Zaporizhzhya and Dnipropetrovsk regions. The main shareholders of the holding are SCM Group (71.24%) and Smart Holding (23.76%), which jointly manage the holding. Metinvest Holding LLC is the management company of Metinvest Group.
Kormotech, Ukraine’s largest producer of cat and dog food, has started exporting its products to the Korean market, the company’s press service told Interfax-Ukraine.
As specified in the report, since June 17, Kormotech’s Optimeal and Club 4 Paws brands have been presented on 12 Korean specialized Internet sites.
South Korea’s pet food market ranks third among East Asian countries, after China and Japan in East Asia. In terms of money, it is three times larger than the Ukrainian market. The share of sales of specialized food for cats and dogs is 50% to 50%.
“The South Korean market is unique in that 67% of petfood sales are made through online channels. This is the highest figure in the world, according to Euromonitor reports. Therefore, one of the challenges in cooperation with South Korea is to gain experience in building and developing online sales in the premium and super premium market,” said Eduard Babenko, Head of Strategic Business Unit Ukraine, Moldova and Southeast Asia at Kormotech.
Kormotech started negotiations with a distributor, Korean company Careside co. Ltd last year, and a cooperation agreement was signed in the fall. At the end of May 2024, the distributor received the first two containers of dry and wet food Optimeal and Club 4 Paws, which is about 24 tons of products.
You Young Kook, CEO of the Korean company Careside co. Ltd. expects that experience in international markets and resources will help the Ukrainian manufacturer to succeed in the South Korean market.
“Kormotech pet food contains high quality ingredients and undergoes rigorous quality control. This is a significant advantage, especially for demanding Korean pet owners. It is impressive to see how the company is constantly deepening its expertise in understanding the approaches to pet food formulation and their impact on the health and quality of life of pets. And most importantly, the efforts it makes to develop a culture of care and companionship with pets,” said You Young Kook.
According to Vladyslav Mazurkevych, Kormotech’s Asia Export Market Development Manager, super premium and premium cat and dog food lines are already available on the following 12 e-commerce sites in South Korea: Naver, Coupang, TM, WM, G-market, Auction, 11th St., Lotte On, Interpark, SSG, CJ on style, GS Shop.
“By the end of this year, we want to start cooperation with pet stores and veterinary clinics so that customers can look at the product, inspect it, and feel it,” Mazurkevych explained.
In 2023, Kormotech’s turnover increased by 22.5% to $152 million from $124 million in 2022. The ratio of sales abroad and in Ukraine in tons is now 31% to 69%, respectively (in 2022, it was 28% abroad and 72% in Ukraine).
The prices of sale and purchase of agricultural land in May 2024 significantly increased compared to the previous months and are now the highest for the entire existence of the land market: the weighted average price per hectare in May was 45.0 thousand UAH, which is 8.2% higher than in April 2024, and 5.6% higher than in March this year, according to a study by the Kyiv School of Economics (KSE), which is conducted on behalf of the USAID program.
According to analysts, the price of land with the intended purpose “for commercial agricultural production” was even higher and reached UAH 46.2 thousand.
“The above prices are based on the official prices registered in the Register of Property Rights during sale and purchase transactions. Market prices for land can be much higher, because most of all transactions are concluded at a price that does not differ from the normative-monetary valuation (the minimum price established by law for former sub-moratorial lands) by more than 2%,” the KSE clarified.
At the same time, experts believe that a slight decrease in prices in April 2024 and an increase in the cost of agricultural land in May this year is unlikely to be a long-term trend.
Since the beginning of 2024, average land prices remain significantly higher than in previous periods. Consequently, it can be stated that the opening of the land market for legal entities in January 2024 has led to structural changes in the market conditions, and as a consequence has led to an increase in the value of agricultural land, according to the KSE study “Land of Indestructibility”.
The Association “Insurance Business” (ASB) appealed to the deputies of the Verkhovna Rada with a request to postpone the deadline for bringing the activities of insurance companies in line with the requirements of the law “On Insurance”, according to the information of the association. According to the new version of the law “On Insurance” adopted on November 18, 2021, insurers must bring their activities in line with its norms until July 1 this year
“We have prepared to the members of Parliament a very reasonable proposal to postpone this deadline to January 1, 2026,” – said the general director of the ASB Vyacheslav Chernyakhovsky.
He pointed out that during the preparation and adoption of the law it was planned that all the changes stipulated by it would be introduced under normal conditions of a relatively stable political and economic situation. But three months after its adoption, Russia’s full-scale military aggression began.
“It is clear that such cardinal changes are impossible in the new conditions of war and the struggle of the whole country with the biggest crisis in its existence,” he emphasized.
In support of this, Chernyakhovsky cites the following facts, in particular, the fact that the vast majority of NBU regulations were adopted in the last decade of December 2023, of which 10 NPAs have an ultra-high level of influence on all business processes of insurers. The consequence of these changes in legislation and regulatory framework is the need to update all internal documents of insurance companies (more than 100 documents with a total volume of more than 1 thousand pages), development of new insurance terms and conditions instead of insurance rules, forms for all insurance contracts, new software, etc.
“Based on this, insurers actually do not have the technical and physical ability to implement all these cardinal changes for the first half of 2024, which also accounts for the compilation and submission of all annual reports to all government agencies, the audit of financial statements, owners’ meetings, etc.” – is noted in the report
As confirmation of the data of the survey conducted by three insurance associations (ASB, LSOU, NASU) in April 2024 on readiness for the new norms of the law, which showed that out of 59 insurance companies that participated in the survey (61% of the total number of companies in the market, which own 86% of the total amount of premiums), only 20% believed that they will be fully ready to complete the necessary modernization of their activities before the date of entry into force of the requirements of the new law.
The Law “On Insurance” also introduces new capital requirements: the minimum amount of which is raised to UAH 32 mln. or UAH 48 mln. depending on the classes of insurance activities and regardless of the size of business and liabilities of the insurer, which negatively affects primarily insurers with Ukrainian capital, the report says.
“Such requirements put in unequal conditions small (mainly with Ukrainian owners) and large insurance companies. It is especially difficult to fulfill them to regional insurers, in particular, working in the regions most affected by Russian aggression: Zaporizhzhya, Kharkiv, Chernihiv and Odessa regions”, is noted in the message.
