Business news from Ukraine

Business news from Ukraine

Economic indicators of Ukraine and the world in January-October 2024

Ukraine’s economy demonstrates steady but uneven growth amid ongoing challenges caused by the war, inflationary risks, and global instability.

GDP growth

According to the Ministry of Economy, Ukraine’s real GDP increased by 3.1% year-on-year in January-October 2024. The growth rate slowed slightly compared to the first months of the year due to the impact of external economic factors and a decline in exports.

“The Ukrainian economy demonstrates strength and adaptability even in the face of large-scale challenges. However, for sustainable development, it is necessary to continue reforms aimed at improving the investment climate and supporting exports,” said Maksim Urakin, founder of Experts Club.

Inflation

Inflation continues to be one of the key issues. According to the National Bank of Ukraine, annual inflation was 9.1% in October, accelerating from 8.5% in September. The main factors behind the price increase were higher energy prices, hryvnia depreciation and high logistics costs.

“Inflation puts pressure on the consumer spending power of the population. It is important that the government pays more attention to tools to curb price growth, including support for national production and the development of the domestic market,” Urakin emphasized.

Foreign trade

The negative balance of Ukraine’s foreign trade in goods increased by 6.4% over ten months compared to the same period last year and amounted to $22.1 billion. Exports decreased by 4.8%, especially for agricultural products and metallurgy, while imports increased by 3.2%, mainly due to purchases of fuel and industrial equipment.

“Ukraine needs to develop export channels more actively, diversify its sales markets and support its producers. This will help to balance the trade deficit and strengthen its position in international markets,” Urakin added.

State budget and reserves

State budget revenues in January-October amounted to UAH 1.91 trillion, which is 12% higher than in the same period of 2023. However, a significant portion of the revenues was provided by international financial assistance. In October, Ukraine’s international reserves decreased by 6.7% to $37.2 billion, due to the repayment of external liabilities and a decrease in foreign exchange earnings.

Global economic situation

The global economy continues to face uncertainty caused by high interest rates, geopolitical conflicts, and the weakening of key economies.

According to the International Monetary Fund, global GDP will grow by 3.0% in 2024, which is in line with forecasts but below the average of recent decades.

USA – the economy grew by 2.5%, supported by high domestic consumption and investment.

Eurozone – growth was 0.8%, due to the recession in Germany and a slowdown in industrial production.

China – GDP grew by 4.6%, but the economy is facing problems in the real estate sector and a decline in exports.

India – remains one of the leaders of growth, showing a 6.9% economic recovery.

“The global economy is balancing between recovery and new challenges. In the coming months, geopolitical instability, energy price fluctuations and financial constraints due to high interest rates will remain the main risks,” – Mr. Urakin noted.

Global trends:

1. Financial markets remain volatile as central banks in leading countries are in no hurry to cut rates.

2. The energy crisis in Europe continues to put pressure on the economy.

3. Rising commodity prices, including oil and gas, are affecting inflationary processes around the world.

Ukraine’s economy has shown moderate growth in the first ten months of 2024, but faces challenges in the form of inflation, trade imbalance, and pressure on the state budget. The global economy remains exposed to risks associated with the high cost of borrowed funds and the slowdown in key countries.

“It is important for Ukraine to continue reforms aimed at supporting business and attracting investment. This is the only way to ensure long-term economic stability and create a solid foundation for future growth,” – summarized Maksim Urakin.

 

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Economic development forecast for Netherlands in 2025 by Relocation

Economic development forecasts for the Netherlands for 2025 point to moderate growth, driven by domestic demand and investment.

According to the forecasts of the Central Planning Bureau of the Netherlands (CPB), after an expected modest economic growth of 0.6% in 2024, the country’s GDP could increase by 1.6% in 2025.

According to the Central Bank of the Netherlands (DNB), inflation in the country in 2025 is projected at around 3% per year, which is higher than the eurozone average.

In 2025, the Dutch government plans revenues of €425.1 billion and expenditures of €457 billion, which will lead to a budget deficit of about 2.5% of GDP, which is in line with European Union standards.

The Netherlands’ exports, which are a key driver of the economy, are expected to reach €70.5 billion in 2025.

According to forecasts, the growth of housing prices in the Netherlands will slow down from 13% in 2024 to 8-10% in 2025 and 6-8% in 2026.

Economic growth in the Netherlands may be at risk if trade conflicts escalate, especially between the United States and the European Union. The possible imposition of high import duties and retaliatory measures could negatively affect the country’s exports and investments.

In general, the outlook for the Dutch economy in 2025 remains positive, but the country should be prepared for possible external challenges and adapt its policies to the changing global economic situation.

Source: http://relocation.com.ua/forecast-economic-development-neder/

 

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Estonian economy forecast for 2025

According to Swedbank, the Estonian economy will return to growth in 2025 after a 0.8% contraction in 2024. GDP growth is projected at 1.5%, and in 2026 the economy may accelerate to 2.5%.

The main growth factors are export recovery and increased investment.

At the same time, household consumption in Estonia will remain relatively weak due to higher taxes and slower growth in real incomes. Inflation will reach 4% in 2025, which is higher than the euro area average. This is mainly due to tax policy and additional household spending.

Despite economic challenges, the labor market in Estonia remains resilient. The employment rate exceeds 69%, which is one of the highest in Europe. However, the rapid growth of wages is outpacing productivity growth, which poses additional risks to the competitiveness of the economy.

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Forecast for Lithuanian economy in 2025

According to Swedbank’s forecast, Lithuania’s economy will grow by 3% in 2025 and by 2.5% in 2026. In 2024, the country’s GDP has already increased by 2.4%, driven by manufacturing growth and retail development.

Factors supporting economic growth include accelerating industrial production, active retail development, and public investment.

However, Lithuania faces serious challenges. In particular, a significant increase in defense spending is needed, which could reach 4-5% of GDP. In addition, the country will have to carry out tax reform, which may affect business and consumer incomes.

Another challenge is the rapid growth of wages, especially in the public sector. This puts pressure on the competitiveness of Lithuanian companies, which are forced to adapt to changing conditions. Inflation is projected at 3% in 2025, and in 2026 it will decline to 2.7%.

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Forecast for Latvian economy in 2025

According to Swedbank, the Latvian economy will show growth of 2.2% in 2025, and in 2026 the pace will accelerate to 2.8%. After a 0.2% decline in GDP in 2024, signs of recovery appeared by the end of the year, which creates positive expectations for the next period.

The main drivers of growth will be an increase in exports, growth in household consumption, and increased public investment.

The labor market in Latvia remains stable: the unemployment rate continues to decline, and wages are growing, although the rate of increase is slowing. Inflation in 2025 is projected at 2.6%, which is moderate.

One of the key challenges for the economy remains the implementation of projects funded by the EU’s Recovery and Resilience Facility (RRF). All planned projects are due to be completed by mid-2026, and their successful implementation could be a catalyst for further economic growth.

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Ukraine’s public debt increased by $22.7 bln to $166 bln over year

Ukraine’s total public debt in 2024 rose to a new all-time high: by $22.74 billion, or 14.3%, to $166.06 billion in dollar terms, and by UAH 1 trillion 461.3 billion, or 26.5%, to UAH 6 trillion 980.9 billion in hryvnia terms, according to the website of the Ministry of Finance.

According to the data, the direct public debt increased by 16.5% in dollars to $159.20 billion, or UAH 6 trillion 692.4 billion, and accounted for 95.9% of the total public and publicly guaranteed debt.

In 2024, Ukraine’s total external public debt increased by 18.1%, or by $18.38 billion, to $114.88 billion, while the total internal public debt increased by 16.7%, or by UAH 276.0 billion, to UAH 1 trillion 863.1 billion.

As a result, the share of total external public debt increased from 70.0% to 72.3% over the year.

According to the Ministry of Finance, the share of liabilities in euros at the end of 2024 increased to 33.01%, in US dollars to 26.81%, in SDRs to 11.39%, in Canadian dollars to 2.83%, in British pounds to 0.11%, while in hryvnia it decreased to 25.33% and in yen to 0.51%.

The agency also clarified that 65.01% of the state debt has a fixed interest rate, while 11.39% is tied to the IMF rate, 12.66% to SOFR, 3.80% to EURIBOR, 0.51% to TORF and 0.10% to SONIA.

The rate for another 2.08% of government debt is tied to the consumer price index, and 4.17% to the NBU discount rate. These are government bonds from the NBU’s portfolio. The newest of these were the securities linked to the key policy rate, which the NBU bought as part of the issue financing of the 2022 budget.

Finally, 0.27% of the state debt has a rate linked to the Ukrainian index of rates on retail deposits, which is used in portfolio guarantee programs.

The Ministry of Finance previously noted that Russia’s full-scale invasion of Ukraine in 2022 led to a sharp increase in the ratio of public debt to GDP – from 43.3% at the end of 2021 to 79.4% at the end of 2023.

As reported, Ukraine’s public and publicly guaranteed debt increased by $13.4 billion in 2022 and by $33.9 billion in 2023.

The IMF, as part of the sixth review of the EFF Extended Fund Facility program with Ukraine last December, improved its forecast for public debt growth due to higher GDP growth and lower deficits: to 92.2% of GDP by the end of 2024 and to 104.3% by the end of 2025, while in October it estimated it at 95.6% of GDP and 106.6% of GDP, respectively.

Earlier, the Experts Club think tank and Maxim Urakin released a video analysis on the state of debt in the world, see more details on the YouTube channel: https://youtu.be/gq7twYrWuqE

 

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