First Deputy Prime Minister – Minister of Economy Yulia Sviridenko, following a visit to Argentina and Chile this week, noted the presence of joint interest in investments and reported on the prospect of concluding bilateral free trade agreements.
“We know that there is already interest of companies from pharmaceutical, agro-sectors, processing industry, which want to deepen cooperation with Ukraine. The free trade agreement with Argentina, which we are currently working on, can also contribute to this. Cooperation with Argentina is reaching a qualitatively new level,” Sviridenko was quoted as saying in the press release of the Ministry of Economy on Thursday.
As First Deputy Prime Minister pointed out in social network X following a meeting with Argentine Economy Minister Luis Caputo, the countries have a lot in common: from economic structures to approaches to the organization of management. According to her, the parties agreed to hold a meeting of the Joint Ukrainian-Argentine intergovernmental commission on trade and economic cooperation in October this year. The last time it was held 18 years ago. In addition, the possibility of holding a Ukrainian-Argentine business forum is being considered, the Ministry said in a release.
“This country is the leader of the strategically important for us region of Latin America, so strengthening the presence of Ukraine on the agenda – a contribution both to the development of business ties and security projects” – summarized Sviridenko.
She recalled that Argentina has allocated 16 packages of humanitarian aid to Ukraine for $600 thousand, and at the moment up to half a million Ukrainians live in the country.
In addition, representatives of the Ministry of Economy met with the Argentine Chamber of Commerce and Services (CAC) and the Argentine-Ukrainian Chamber of Commerce and Industry (CAUCI) and invited business and government representatives to participate in the Ukraine Recovery Conference (URC-2024), which will be held June 11-12 in Berlin.
“(…) On the agenda – the First Global Peace Summit initiated by President Vladimir Zelensky, strengthening business ties, deepening cooperation in the defense sector, support for the Ukrainian energy system against the background of Russia’s systemic shelling of our energy capacities,” – accentuated First Deputy Prime Minister.
It is indicated that the Ukrainian side also invited the leaders of Argentina to join the Global Peace Summit and become a co-leader of the working group on one of the items of the Peace Formula.
After Argentina, the Ukrainian delegation, which also includes the Minister for Strategic Industries Oleksandr Kamyshyn, Deputy Minister of Economy Oleksiy Sobolev, Ukrainian Trade Representative Taras Kachka, Deputy Minister of Defense Dmytro Klymenkov, and representative of the Commissioner for Equal Rights and Freedoms of Rights of National Minorities of Political and Religious Views Mikhail Spasov, went to Chile.
“The first visit of a high-ranking Ukrainian delegation to Chile in 19 years,” Sviridenko emphasized on social network X. She also invited Chilean business and government representatives to the URC-2024 in Berlin, promising them very concrete projects from partners.
“We have a lot in common with Chile, especially in mining and critical materials. We hope to deepen cooperation in this area. We also discussed the issue of logistics. The next step of our cooperation is to deepen the dialog at the level of chambers of commerce and industry of our countries,” First Deputy Prime Minister said.
At a meeting with Chilean Economy Minister Niko Grau, Sviridenko said that both sides are interested in sharing experience in attracting investments, pointing out that there is already an example of a Ukrainian company that has invested in Chile.
“The areas where we see the greatest potential for growth are mining, especially in terms of critical materials, agribusiness and digitalization. Also, Chile has a rich experience in developing public-private partnerships and is ready to share it,” the First Deputy Prime Minister pointed out.
At a meeting with Chilean Foreign Minister Alberto Claveren, Sviridenko invited Chilean leaders to join the first Global Peace Summit, in particular, to lead the fourth point of the peace formula concerning the return of Ukrainian children illegally deported by Russia. She thanked Chilean President Gabriel Borich, who expressed his willingness to join the Summit.
Ukrainian Parliament Speaker Ruslan Stefanchuk is on an official visit to Turkey on May 13-15.
According to the press service of the Ukrainian parliament’s apparatus, Stefanchuk will hold a number of bilateral meetings and negotiations in Ankara, including with the chairman of the Grand National Assembly of Turkey, Numan Kurtulmuş.
During the meetings will touch upon the topics of realization of the Formula of Peace of Ukrainian President Volodymyr Zelensky, the reconstruction of Ukraine, in particular, the involvement of Turkey in the reconstruction process.
“The purpose of the visit is to deepen strategic cooperation between Ukraine and Turkey, to expand interparliamentary cooperation, as well as to overcome the negative consequences of Russian aggression, which threatens stability and development in the Black Sea region”, – stated in the message of the press service.
Land plots are being bought even more than in 2021
Ukrainians began to buy and sell land and real estate more actively in the first quarter of 2024, according to the Unified Register of Notarial Forms of the Ministry of Justice. Over 185,000 land alienation agreements were registered during this period. This is 36.4% more than before the full-scale invasion. And alienations of other real estate increased by 55% – but this is still less than in 2021.
In 2024, Ukrainians are more likely to sell or transfer land to other ownership. In particular, 185 thousand land alienation agreements were drawn up by notaries in the first quarter of 2024. This is 56% more than in the same period last year: then notaries certified almost 119 thousand such forms.
The number of such agreements is already a third higher than before the start of the full-scale war. Back then, in 2021, more than 136 thousand land alienation agreements were formalized.
At the same time, the number of alienations of real estate other than land has increased by one and a half times this year. Thus, in the first quarter of this year, notaries certified more than 181 thousand such forms. For comparison, in the same period last year, there were almost 117 thousand such transactions.
However, this is still 16% less than before the full-scale campaign began: just over 216 thousand forms were used for land alienation.
It should be noted that one notarial act does not always require only one notarial form. Accordingly, the number of actions is approximate and is compared to previous years.
It should be reminded that the total number of notarial forms used last year increased by 2.6 million) , but still remains lower than before the outbreak of full-scale war.
The Cabinet of Ministers of Ukraine has agreed with the proposal of the Ministry of Energy to establish a state-owned enterprise (SOE) Marine Oil Terminal Pivdenny and to include it under the management of the said ministry. This is stated in the Cabinet’s order No. 381-r dated April 30, 2024, “On approval of the creation of SOE Marine Oil Terminal Pivdenny,” published on the government portal.
“The Ministry of Energy, together with NJSC Naftogaz Ukrainy, shall take measures to transfer the objects of the oil distribution and gas distribution system of the marine oil terminal Pivdenny, which are state property and are in the possession of NJSC Ukrtransnafta, to SOE Marine Oil Terminal Pivdenny,” the document says.
A total of 100% of the shares of Ukrtransnafta belong to NJSC Naftogaz Ukrainy.
CRH Group, the largest building materials manufacturer in North America and Europe, has invested $80 million in Ukraine over the course of the full-scale invasion. Guillaume Cavalier, President of CRH in Central and Eastern Europe, told Forbes Ukraine that the group’s total investments in Ukraine over 25 years of work amount to more than $500 million. According to him, in the context of rebuilding infrastructure in Ukraine, it is important to use cement produced locally, which will provide jobs and higher revenues to the state budget.
Cavalier emphasized that for the potential growth of the Ukrainian cement market after accession to the EU, it is important to invest in the expansion of production facilities now. He reminded that the Antimonopoly Committee of Ukraine (AMCU) is currently considering CRH’s application to acquire assets of Italian Buzzi in Ukraine – cement plants Volyn-cement (Zdolbunov, Rivne region) and YuGcement (Olshanskoe, Mykolayiv region).
As reported, on January 23, AMCU reported about the beginning of consideration of the case on concerted actions in the form of fulfillment of provisions on refraining from competition, enshrined in the concentration agreement between the Irish group CRH and Dyckerhoff GmbH, which own assets in Ukraine.
In June 2023, Italian cement producer Buzzi, listed by the National Agency for the Prevention of Corruption as an international sponsor of war, through its subsidiary Dyckerhoff GmbH, reached an agreement to sell part of its business in Eastern Europe to Irish group CRH, including Ukrainian assets in the form of two cement plants. The transaction is expected to close in 2024.
Later, in September 2023, the AMCU returned CRH’s application for concentration without consideration due to non-compliance with the requirements, and also noted that the group occupies about one-third of the Ukrainian cement market. In October of the same year, the agency reopened the case.
CRH has been operating in Ukraine since 1999. Since November 2021, its cement enterprises in Ukraine have been operating under the Cemark brand: Podolsk Cement JSC (Khmelnytskyi oblast), Cement LLC (Odessa) and Mykolaivcement PJSC (Lviv oblast).
A separate business area of CRH in Ukraine is production concrete and reinforced concrete products. PoliBeton Energo’s Bila Tserkva Reinforced Concrete Plant is a specialized enterprise that produces supports for power transmission lines. PoliBeton’s concrete unit in the north of Odessa joined CRH in 2020.
CRH is a leading manufacturer of construction materials in the world. The company employs about 71,000 people at its 3,200 plants in 28 countries. It is the largest producer of building materials in North America and Europe. The company is also present in Asia. American depositary shares of CRH are listed on the New York Stock Exchange.
The National Bank of Ukraine has estimated Ukraine’s real gross domestic product (GDP) growth in the first quarter of 2024 by the same period last year at 3.1%, while in January it forecast it at 7.1%.
“Real GDP growth in the first quarter of 2024, according to NBU estimates, was weaker than expected, primarily due to restrained budget expenditures amid uncertainty about the receipt of external financing. An additional factor was the blockade of the western border, which restrained the activity of certain types of activities,” the National Bank explained in the Inflation Report published on its website.
At the same time, as the NBU pointed out, stable operation of the sea corridor, favorable weather and increased domestic demand supported economic growth. The central bank added that fiscal policy remained accommodative and, together with the effect of a significant increase in fiscal spending at the end of 2023, significantly fueled aggregate demand.
Earlier, in late April, the Economy Ministry estimated Ukraine’s GDP growth at 4.5% in the first quarter of this year.
As the National Bank notes, moderate GDP growth rates will remain until the end of 2024. “The main factors of growth will remain the preservation of soft fiscal policy, revitalization of external demand, as well as further adjustment of business and population to the conditions of significant security threats. However, the pace of economic growth will slow given the impact of the war and the depletion of growth momentum from the low base of 2022,” the NBI pointed out.
It added that the recovery will also be constrained by the impact of the destruction of energy infrastructure.
According to the updated forecasts, GDP growth will accelerate to 3.7% in the second quarter (the NBU expected it at 4.8% in January) before slowing to 1.3% (1.7%) in the third quarter and accelerating again to 4.1% (2.0%) in the fourth quarter.
Overall, for 2024, the NBU worsened its growth forecast for the Ukrainian economy to 3% from 3.6% in its January report, and for 2025 to 5.3% from 5.8%.
“The negative contribution of revised estimates of the e/e deficit to the change in real GDP in 2024 is estimated at 0.6 percentage points (pp), and 0.5 pp in 2025. Instead, the impact on GDP of a smaller grain harvest in 2024 will be insignificant due to the reorientation of agricultural producers to more marginal crops, particularly oilseeds,” the central bank said.
According to the regulator, the balance of risks of the baseline forecast is shifted towards deterioration of Ukraine’s economic growth rates and increased price pressure.
The National Bank in the updated Inflation Report increased the number of key risks of the forecast (with a strong impact and probability of 25-50%) to three: to the risk of a longer period and intensity of the war added the risk of large budgetary needs (a quarter earlier the NBU estimated its probability at 15-25%) and large damage to energy and port infrastructure (a quarter earlier the impact of this risk the central bank considered moderate).
At the same time, the probability of the risk of reduction of volumes and loss of rhythm of international aid receipts and continuation of partial blocking of cargo traffic across the border by some EU countries was reduced from 25-50% to 15-25%, but the degree of impact of the latter risk was increased from weak to moderate.
In addition, the NBU added a new risk – aggravation of the situation in the Red Sea, but estimated its probability at 15-25% and the degree of influence as low, as well as excluded the risk of increasing the capacity of maritime export routes, which is positive for the forecast.
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 – https://youtu.be/w5fF_GYyrIc?si=BsZmIUERHSBJrO_3 Subscribe to Experts Club YouTube channel here – https://www.youtube.com/@ExpertsClub.
EXPERTS CLUB, GDP, MACROECONOMICS, NATIONAL BANK, UKRAINE, URAKIN
