Prime Minister of Ukraine Denys Shmyhal noted that the Ukrainian economy began to recover in the third quarter.
“In the third quarter, the Ukrainian economy began to recover. In addition to the recovery in consumption, this was positively affected by the harvest, which was actually postponed from the second quarter to the third due to weather conditions. Also, according to forecasts of the Ministry of Economy, in the next three years, GDP will grow on average more than 4% annually,” wrote Shmyhal on his official Facebook page on Saturday night.
The premier noted that the situation with the coronavirus is not only a serious blow to the medical systems of different countries.
“This is also one of the largest economic recessions in the past 70 years. Almost all world economies showed a rapid decline in GDP in the second quarter,” Shmyhal said.
Minister of Economic Development, Trade and Agriculture of Ukraine Ihor Petrashko advocates for reducing the number of ministries, while noting that the discussion on dividing his ministry into agrarian and economic departments continues.
“Personally, I am not a supporter of constant changes. If there is a need for them, it is needed to make them gradually. There are periods of bureaucratic instability within some similar changes. However, again, there is a statement by the president and a discussion in parliament. What format will be agreed upon? The main thing is efficiency and results,” he told Interfax-Ukraine.”I support reducing the number of ministries,” the minister said.
According to him, the discussion regarding the post of deputy prime minister for industry or a separate body in this area has also not been completed.
“There is still the discussion about new formats and posts, there are different statements. It is important to find the right format in this case,” Petrashko said.
The opening of food markets is important for the economy, while the rest of businesses are planned to open after May 11, Health Minister of Ukraine Maksym Stepanov told a press briefing on Thursday.
“The opening of food markets is a very important step. The markets, which sell around 70% of agricultural products, are very important for the economy and prices for these products. We have found a way to open them and to avoid the spread of the coronavirus disease. As to the rest of businesses, we are planning to open them after May 11,” he said.
The lifting of the moratorium on the sale of agricultural land is a significant impetus to the development of the economy, farming and the agro-industrial complex.
“The lifting of the moratorium on the sale of agricultural land is a significant impetus for the development of the economy, farming, the agricultural complex in Ukraine,” Prime Minister Denys Shmyhal said on Telegram.
As reported, on the night of March 31, the Verkhovna Rada at an extraordinary meeting adopted a law on opening the land market from July 1, 2021 with the restriction of its work in the first three years only to land plots owned by individuals with a maximum ownership of 100 hectares per capita.
The Black Sea Trade and Development Bank (BSTDB) has said that the bank is ready to send around EUR 9000 million to help the sectors affected by the coronavirus disease COVID-19 spread.
“The bank intends to refocus its financing of approximately EUR 900 million, planned for new operations in 2020, to assist the sectors and industries most affected by the turmoil caused by the COVID-19 infection,” the bank said in a press release issued on Tuesday.
The bank said that in these difficult times the BSTDB is sympathetic to the efforts its member states make to contain the spread of the coronavirus and reduce the negative impact it has on human lives, societies and economic activity.
“We will offer additional technical assistance to affected clients to facilitate project preparation, including business plans, feasibility studies, environmental impact assessments, etc. The Bank will focus on assisting municipalities, utilities, manufacturing and pharmaceutical companies being on the front line of the fight against COVID-19,” the bank said.
The BSTDB is an international financial institution established by Albania, Armenia, Azerbaijan, Bulgaria, Georgia, Greece, Moldova, Romania, Russia, Turkey, and Ukraine.
The international rating agency Fitch Ratings expects acceleration of growth of the Ukrainian economy from 3.2% in 2019 to 3.5% in 2020 and 3.8% in 2021 due to private consumption and investment. “According to official estimates, the economy grew by 3.2% in 2019 and Fitch expects growth of 3.5% in 2020 and 3.8% in 2021 supported by private consumption and investment. The revised version of the land market legislation will be positive for economic growth in the near term through increased consumption (as result of land sales) and expected increase in the demand for credit for the agricultural sector. Nevertheless, the scale of potential investment and productivity improvements will be constrained by limits on foreign investors’ participation,” the agency said on its website.
“Fitch considers that growth and investment prospects depend on the adequate and timely implementation of reforms to address constrains such as the rule of law, corruption, customs and taxation and law enforcement. As with other emerging markets, downside risks to the growth outlook have increase due to uncertainty of the impact of COVID-19 on global growth and commodity prices,” according to the report.
“Fitch considers that the NBU’s (the National Bank of Ukraine) easing cycle, lower portfolio inflows, a wider current account deficit and increased global uncertainty will lead to a weaker hryvnia in 2020 relative to 2019. External financing needs will remain high relative to peers (70% of international reserves) due to still large debt repayments and wider current account deficits. External sovereign amortizations (government plus NBU) will rise to $5 billion in 2020 and $4.8 billion in 2021 (external bond repayments averaging $2.4 billion). Fitch expects the current account deficit to widen to 3% and 4% of GDP in 2020 and 2021, respectively, from a low 0.7% in 2019, driven by continued import growth boosted by domestic demand and reduced gas transit fees,” the document states.
“As inflationary pressures remain subdued (3.2% in January), Fitch expects inflation to average 4.6% in 2020 and 5.3% in 2021,” Fitch experts said.
“Risks from international financial market volatility, delays in the IMF program approval or stronger-than-anticipated domestic demand pressures will determine the future pace and scale of the easing cycle. Fiscal risks for 2020 stem from weaker revenue growth due to a stronger than budgeted hryvnia and lower privatization revenues in addition to still to be defined social expenditure increases announced by the incoming authorities. Receipts from the Naftogaz arbitration award will help cushion government revenues and provide room to accommodate expenditure commitments under the 2020 budget, targeting a 2.1% of GDP deficit,” Fitch stated.
