The Ministry for Development of Economy, Trade and Agriculture maintains its forecast for the growth of Ukraine’s GDP in 2021 at 4.6%, Minister Ihor Petrashko, has said, commenting on a statement by Deputy Head of the Office of the President Yulia Svyrydenko about the expected GDP growth of 5.1% in 2021.
“We keep our forecast at 4.6%, the first quarter it is 3% down, so far for the two months it is 2.2% down,” Petrashko said in an exclusive comment to Interfax-Ukraine on Thursday on the sidelines of the Ukraine 30 forum.
This forecast takes into account the risks of additional lockdowns, the minister said.
“We hope that there will be no [strict quarantine restrictions]. Last year we predicted a 4.8% decline of the economy, but in fact we got a drop of 4.2%,” Petrashko said.
“There are no such talks [about an all-Ukrainian lockdown] for the entire Ukraine,” he said.
The Ministry of Economic Development, Trade and Agriculture of Ukraine on August 17 signed an annex to the grain memorandum with grain market participants and agreed on the maximum grain export volume in the 2020/2021 marketing year (MY, July-June) at the level of 17.5 million tonnes of wheat and 1,000 tonnes of rye.
“The grain memorandum is a good example of the ability to negotiate and make balanced decisions. In our common opinion, the export of 17.5 million tonnes of wheat and 1,000 tonnes of rye for this marketing year is the benchmark that will preserve our internal food security. In addition, taking into account the coronavirus crisis, in the forecast balance, we have increased the volume of carry overs by half a million tonnes, to 1.7 million tonnes,” Minister of Economic Development, Trade and Agriculture of Ukraine Ihor Petrashko is quoted as saying.
In addition, depending on weather conditions and the final data on wheat production from the State Statistics Service, the forecast grain market balances may be revised by the signatories of the memorandum in the fourth quarter.
Now the Ministry of Economy predicts the grain harvest in Ukraine this year at 72.1 million tonnes.
The ministry clarified that the grain memorandum has been signed annually since 2011. The document provides for interaction of grain market participants, exchange of information, monitoring the grain market.
The Ministry of Economic Development, Trade, and Agriculture of Ukraine supported the concept of horticulture development until 2025 elaborated by the Ukrainian Horticultural Association (UHA) together with the Institute of Water Problems and Land Reclamation, the Institute of Horticulture and Melon Сultivation, the Ministry of Economic Development, Trade, and Agriculture and Ukrainian vegetable producers.
According to the press release of the UHA, the major problem, which the concept is aimed at, is to provide the population of Ukraine with quality vegetable and melon products, as well as the development of effective competitive production.
“The volume of vegetable commercial market in Ukraine according to different estimates is about UAH 60 billion in wholesale prices. The greatest challenge for the industry is the informal economy, reaching 75-80% of the total volume, which amounts to UAH 40 million in monetary equivalent. The share of retail chains, which pay VAT on sale in the Ukrainian vegetable retail market, does not exceed 15%. Moreover, price fluctuations in the internal market sometimes exceed 1,000% per year,” the Head of UHA, Fedir Rybalko, is quoted in the report.
Among other problems in vegetable production, he singled out the growth of vegetable imports and the decline in exports. He says that in 2019, exports fell to 70,000 tonnes, while imports reached almost 200,000 tonnes.
“We included five areas in the concept that could improve the situation in the sector. Addressing the issue of price fluctuations and unshadowing requires an incentive for smallholder farmers, family farmers and individuals to integrate into the civil market, allowing producers to gain access to government support and funding programs, and to obtain better prices for their products,” the head of the association noticed.
The Ministry for Development of Economy, Trade and Agriculture of Ukraine predicts growth of GDP in 2021 at 4.6% with inflation of 7.3%, according to a draft resolution put on the agenda of the Wednesday government meeting.
According to the document, in 2022, GDP would grow by 4.3% with inflation of 6.2%.
According to the draft resolution, export growth is expected 2.9% next year and 6.4% in 2022, while import growth is projected at 10.6% and 10%, respectively.
The trade deficit will amount to $10.4 billion in 2021 and $13.6 billion in 2022, the ministry said.
The Ministry of Economic Development, Trade and Agriculture predicts that Ukrainian farmers will harvest 63-65 million tonnes of grain and leguminous crops in 2020 against the previously projected 60 million tonnes. “Looking at the sown area, we expect the final gross grain production at the level of 63-65 million tonnes, which is 2.5 times more than the domestic market needs. We can formulate the final figure at the end of May, everything will depend on rains in this period. According to the forecast, they should be. Perhaps even the figure will be larger,” Deputy Economy Minister Taras Vysotsky said on the air of Ukraine 24 TV Channel.
Vysotsky noted that there are no threats to food security nationwide due to adverse climatic conditions, a critical situation has developed only in Odesa region.
“The losses there are large, sometimes up to 50% of the sowings. Now they’ll sum up the potential losses, they will transfer documentation, hold commissions and consider the possibility of financing from the reserve fund or other available instruments. We will study the situation in this region to support those farmers who have a large percentage of losses and there is a risk of becoming bankrupt,” the official said.
The Ministry of Economic Development, Trade and Agriculture expects GDP to grow by 3.7% in 2020, Deputy Minister Serhiy Nikolaichuk has said. “Next year, we expect growth to accelerate to 3.7%,” he said during a press briefing.
The minister noted that the updated macroeconomic forecast would be published after it is approved at a government meeting.
