Business news from Ukraine

Japan’s economy posted contraction in first quarter

Japan’s economy contracted 0.5% in the first quarter relative to the previous three months, according to preliminary government data. Analysts, whose average estimates are quoted by Trading Economics, had expected a 0.4% decline in GDP.

According to the revised data, the economy was unchanged in the fourth quarter of 2023, while previously reported growth of 0.1%.

On an annualized basis, Japanese GDP contracted 2% last quarter after a revised zero change a quarter earlier. The consensus forecast called for a 1.5% drop in January-March.

Consumer spending in the first quarter decreased by 0.7% relative to the previous three months, business investment – by 0.8%. Government spending rose by 0.2%.

Exports decreased by 5% after growth of 2.8% quarter earlier, imports – by 3.4% (+1.8% in October-December).
Earlier Experts Club analytical center and Maxim Urakin released a video analysis of how the GDP of the world’s countries has changed in recent years, more detailed video analysis is available here –

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Japan intends to increase its presence in investment market of Ukraine

Japan intends to increase its presence in the Ukrainian investment market, in particular, to expand business ties in the field of investment and trade, Japanese partners will open an office of the Japan External Trade Organization JETRO in Kyiv, the Ministry of Economy of Ukraine reported following a meeting on April 23 between Deputy Minister and Trade Representative Taras Kachka and the Economic Mission of the Government of Japan.

“The governments of Ukraine and Japan are already preparing a draft updated Agreement on the Promotion and Protection of Investments, which will promote economic development and expand trade between the two countries. The agreement will, in particular, provide Japanese investors with reliable legal protection and guarantees for their investments, which is an important incentive for investment in the private sector and projects to restore Ukraine,” Kachka was quoted as saying in the release.

It is stated that Japan plans to provide EUR 160 million to support Ukraine’s economic recovery projects. Ukraine’s priorities include energy, housing, critical infrastructure, humanitarian demining, and business support.

The participants also discussed the participation of representatives of the Japanese government and Japanese business in the Ukraine Recovery Conference (URC 2024) in Berlin on June 11-12 this year, as well as preparations for EXPO 2025 in Osaka and the Ministerial Meeting of the Organization for Economic Cooperation and Development (OECD).


Ukraine’s Ministry of Finance received $118 million grant from Japan

The Ministry of Finance of Ukraine has received $118 million on a non-refundable basis from Japan under the World Bank’s Health Enhancement and Life Saving (HEAL Ukraine) and Housing Repair for People’s Empowerment (HOPE) projects.

“The raised funds under the HEAL and HOPE projects will help the government to provide its citizens with adequate assistance, in particular, to expand the range of medical services and access to them, as well as to ensure overcoming the consequences caused by Russia’s armed aggression, to restore the housing infrastructure of Ukraine,” Minister Serhiy Marchenko was quoted as saying in the release of the Ministry of Finance on Monday.

It is specified that the attracted grant funding consists of $70 million under the HEAL Ukraine project, aimed at supporting the state budget as a reimbursement of incurred expenses under the Medical Guarantee Program, and $48.2 million – under the HOPE project, the funds of which are used to reimburse state budget expenditures used for compensatory payments to homeowners for repairs in apartment buildings and private houses in need of minor and medium repairs.

As reported, Ukraine received a record $8.9bn in international financial aid in March after only $1.2bn cumulatively in the first two months.

Due to the low external support, international reserves fell by 3.8%, or $1.47 billion, to $37.05 billion in February, after falling by 4.9%, or $1.98 billion hryvnia, in January.

The National Bank had forecast that the latest external inflows would allow international reserves to recover substantially. In January, it lowered their forecast for the end of 2024 to $40.4 billion from $44.7 billion.

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Ukraine receives $230 mln loan from Japan to restore agriculture

Ukraine’s state budget has received a $230 million loan from the Japanese government under the World Bank’s Emergency Project for Inclusive Support for the Recovery of Agriculture in Ukraine (ARISE), the Finance Ministry said on Friday evening.

“In the conditions of war, agriculture suffers significant losses, which, in turn, jeopardizes food security not only in Ukraine but also around the world. Raising funds under ARISE is an important contribution to providing access to financing for the agricultural business of Ukraine,” Finance Minister Sergii Marchenko said in a release.

It is specified that the funds were raised from the Trust Fund for the Promotion of the Necessary Expansion of Credit for Ukraine (ADVANCE Ukraine).

The Ministry of Finance recalled that the ARISE project aims to support farmers’ access to finance through concessional lending (compensation for costs under the 5-7-9 program) and improve small farms’ access to finance through grants.

The amount of project funding is currently $550 million, of which $500 million will be used to finance the state program “Affordable Loans 5-7-9%” in 2023-2024 with a focus on agricultural enterprises, and almost $50 million is provided for grants for small farmers.

As reported, on March 20, Ukraine received the first tranche of EUR4.5 billion from the EU under the Ukraine Facility program and $1.5 billion from Canada, while before that, all external revenues amounted to only $1.2 billion since the beginning of the year. In addition, on Friday night, the IMF Board of Directors approved the disbursement of the fourth tranche of the EFF Extended Fund Facility program to Ukraine, which should arrive in two to three days.

According to the National Bank, Ukraine may receive external financing worth $10 billion or even more from mid-March to the end of April, against the $37.3 billion required in the state budget for the entire year.

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Ukraine has received $760 mln in grants from Japan and Norway

Ukraine has received $760 million in grant funds from Japan and Norway, Ukrainian Prime Minister Denys Shmyhal has announced.

“The funds were received through the World Bank’s PEACE in Ukraine mechanism. They will be used to cover the priority expenditures of the state budget,” Shmyhal wrote in a telegram on Wednesday.

According to him, in 2024, Ukraine expects tangible financial support from Japan. “We have held many talks on this issue in Tokyo and obtained significant results. I thank our partners for their unconditional support,” Shmyhal wrote.

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Japan is interested in supporting Ukraine’s agricultural sector and training veterans

Japanese partners have confirmed their interest in projects to support Ukraine’s agricultural sector and train veterans, and the respective teams of the two countries are working together to find ways to implement these intentions, said Vitaliy Koval, chairman of the State Property Fund, following the visit of a Ukrainian delegation led by Prime Minister Denys Shmyhal to the Conference on Economic Development and Reconstruction in Tokyo.

According to a release from the Fund, its head spoke about the key areas of the agency’s work, investment proposals for Japanese business, and new projects of the SPFU team – work with sanctioned property and the Land Bank, which is scheduled to be launched at the end of this year.

Regarding the latter project, the head of the Fund had a separate meeting with representatives of the Ministry of Agriculture, Forestry and Fisheries of Japan, as the SPFU manages 386 thousand hectares of agricultural land, which should work for the Ukrainian economy and bring profit to the state budget.

According to Koval, the meeting discussed attracting Japanese investors to the Ukrainian agricultural sector, in particular, the use of their equipment, as the need of Ukrainian farmers for mechanized machinery with a capacity of up to 200 hp is very high, and the world leaders in the production of such equipment are concentrated in Japan.

“Ukragroleasing can become their partner here. The company is managed by the SPFU and can help with leasing equipment,” said the head of the Fund.

He also called on foreign partners to pay attention to one of the most important areas of work for the whole country – retraining and training of veterans, which is the management and maintenance of agricultural machinery.

Koval said that the State Property Fund has the capabilities to assist in training: it can be conducted at the SPFU’s training centers, and such facilities will become training centers for operators and service engineers for Japanese agricultural machinery.

As reported, during the visit, the Ukrainian delegation signed 56 documents related to cooperation in many sectors of the economy of the two countries.