Business news from Ukraine

CABINET OF MINISTERS OF UKRAINE EXPECTS SALARY GROWTH WILL BE FROM 8% TO 10% IN NEXT THREE YEARS

The Cabinet of Ministers of Ukraine expects inflation to drop to 6.2% in 2022, and salary growth will be from 8% to 10% in the next three years, Prime Minister Denys Shmyhal said following the results of the government-approved Budget Declaration and the 2022-2024 Forecast of Economic and Social Development.
“The growth of salaries in the next three years will be approximately 8% to 10% per year (taking into account inflation). Inflation will return to the target of 5% in 2023, and it will be 6.2% in 2022,” Shmyhal said in Telegram channel on Wednesday.
At the same time, the hryvnia exchange rate is expected in the range of UAH 28 or UAH 29 per $1 in 2022-2023, the head of government said.
According to him, the approved documents provide for the reduction of the budget deficit by almost half and the return of this indicator to the planned 3% in 2023.
“The public debt is planned to be reduced to less than 50% of GDP,” Shmyhal said.
At the same time, from 2023, Ukraine will be able to enter a stable trend of economic development by 5% per year, he said.

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UKRAINE APPROVES PROJECT TO RAISE $100 MLN LOAN FROM IBRD EXPORT-ORIENTED COMPANIES

The Cabinet of Ministers at an extraordinary meeting on April 19 approved a project to attract a $ 100 million loan from the International Bank for Reconstruction and Development (IBRD) for export-oriented small and medium-sized enterprises (SME), the Ministry of Finance said.
“Today, on April 19, 2021, the has government adopted a resolution on some issues of the implementation of the joint investment project with the IBRD on additional financing to counter COVID-19 within the framework of access to long-term financing, the Finance Ministry’s website said.
The additional financing project provides for a loan from the IBRD in the amount of $ 100 million to provide export-oriented SMEs with access to long-term financing, the ministry explained.
The Ministry of Finance notes an increase in demand from potential financial institutions participating in the project amid the coronavirus crisis.
At the same time, the government supported the draft presidential decree on the creation of a Ukrainian delegation to participate in negotiations with the IBRD and authorized the chairman of the board of Ukreximbank to sign the guarantee agreement between Ukraine and the IBRD, the Ministry of Finance said.

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FROM APRIL UKRAINE TO BAN IMPORT OF WHEAT, SUNFLOWER OIL, PAPER FROM RUSSIA

The Cabinet of Ministers has supplemented the list of goods originating from the Russian Federation, prohibited for import into Ukraine, with wheat, sunflower oil, detergents, and paper.
According to the document, the list of prohibited goods was also replenished with surfactants, newsprint, cardboard, kraft paper and kraft cardboard, toilet paper, cosmetic napkins, hand towels, tablecloths and napkins.
The list also includes containers, boxes, bags, packing bags, ropes made of other alloy steels, drilling tools, other trolleys and undercarriage balancing trolleys, axles, wheels and their parts, according to the resolution.
The resolution comes into force ten days after its publication.

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UKRAINE INTENDS TO PRIVATIZE EIGHT STATE-OWNED ENTERPRISES

The Cabinet of Ministers has transferred eight state-owned enterprises to the management of the State Property Fund (SPF): Ecotransenergo, Kharkiv Industrial and Trade Enterprise, State Scientific and Technological Production Enterprise Veresk, Settlement and Clearing Center, Industrial and Metallurgical Consulting, state-owned enterprise State Information Analytics, Polupanivka Quarry, as well as the state institution Partner Fund.
The resolution was adopted by the government at a meeting on Wednesday without discussion.
According to an explanatory note to the draft resolution, out of these enterprises, as of July 1, 2020, only three were economically active. These are Ecotransenergo, Kharkiv Industrial and Trade Enterprise, and State Information Analytics.
The total value of Ecotransenergo’s assets as of in the middle of 2020 was estimated at UAH 47 million, Kharkiv Industrial and Trade Enterprise – UAH 22 million, while the value of their assets in the first half of 2020 fell by 6.5% and 3%, respectively, according to the document.
In the first half of last year, both companies posted losses totaling over UAH 4 million, while Ecotransenergo also has wage arrears of over UAH 1.7 million.
As indicated in the explanatory note, there is no data on the activities of SOE State Information Analytics.

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UKRAINE INTENDS TO AGREE WITH KFW ON EUR 36.5 MLN FINANCING

The Cabinet of Ministers intends to sign several additional agreements between the government, the Ukrainian Social Investment Fund (USIF) and the German state bank KfW on the development of social infrastructure in the country for the amount of EUR 36.5 million.
The relevant draft documents were adopted at a government meeting on Wednesday.
In particular, a draft supplementary agreement to the agreement dated April 19, 2018 signed with KfW for UAH 9 million was approved for the Promotion of Social Infrastructure Development Project; a draft supplementary agreement to the agreement dated May 20, 2019 signed with KfW for the amount of EUR 14.45 million for the Promotion of Social Infrastructure Development. Improvement of Rural Basic Health Project; a draft agreement with KfW for the amount of UAH 13.1 million for the Promotion of Social Infrastructure Development Project.
Deputy Prime Minister, Minister for Reintegration of Temporarily Occupied Territories of Ukraine Oleksiy Reznikov was authorized to sign the documents.

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UKRAINE APPROVES CONCEPT OF DONBAS ECONOMIC DEVELOPMENT

The Cabinet of Ministers of Ukraine has approved the Concept of economic development of Donetsk and Luhansk regions until 2030.
The relevant decision was made at the Wednesday government meeting.
The purpose of the document is to determine the conceptual approaches and main directions of the strategy for the economic development of Donbas for the creation of regulatory, institutional and organizational conditions for the formation and development of the economy of Donetsk and Lugansk regions.
According to the concept, the reboot of Donbas economy will take place in two stages: firstly, under current conditions in the controlled territory of the regions, secondly, throughout Donetsk and Luhansk regions after reintegration.
According to Prime Minister of Ukraine Denys Shmyhal, these territories require additional incentives that will create an attractive platform for involving investments.
In particular, this is about development in the direction of the real sector of the economy, industrialization, the development of critical infrastructure and logistics.

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