The World Bank revised upward its forecast for Ukraine’s gross domestic product (GDP) growth in 2021 to 3%, while early October it estimated the prospects for recovery to be twice as modest – at 1.5%.
According to the January 2021 World Bank’s Global Economic Prospects, estimates of the fall of the Ukrainian economy this year at 5.5% and its growth by 3.1% in 2021 remained at the same level.
As reported, the Ministry for Development of Economy, Trade and Agriculture of Ukraine maintains an estimate of the fall in Ukraine’s GDP in 2020 by 4.8% at the end of the year and expects its growth by 4.6% in 2021.
The National Bank of Ukraine (NBU) had previously expected the economy to decline by 6% last year, but towards the end of the year it improved its estimates, to about 5%, predicting a recovery in 2021 by 4.2%. The updated macroeconomic forecast of the NBU will be announced on January 21.
The National Bank of Ukraine (NBU) is oriented on the growth of the country’s international reserves in 2020 from $25.3 billion at the beginning of the year to more than $27 billion at the end of the year, Deputy Governor of the National Bank Yurii Heletii has said.
“The indicator of international reserves will be higher than at the beginning of the year. Let me remind you that at the beginning of the year it was $25.3 billion. Our target is more than $27 billion,” he said.
According to the banker, the final volume of international reserves will depend on placements by the Ministry of Finance.
He explained that in the October forecast of the NBU, which assumed that international reserves at the end of this year will amount to $29 billion, it was planned to receive financing from the IMF, the World Bank and the EU.
According to the official, the state of international reserves is satisfactory and, according to the composite criterion, which is calculated according to the EU methodology, exceeds 90%.
As reported, the European Commission, on behalf of the European Union, issued EUR 600 million to Ukraine as part of the macro-financial assistance program related to COVID-19.
The volume of marketable output of Kyivsky cardboard paper mill (Obukhiv, Kyiv region), a leader in Ukraine’s pulp and paper industry in terms of production and sales, totaled UAH 4.672 billion in January-October 2020, which is 0.7% more than the same figure in January-October 2019.
According to the statistics of the Ukrpapir association, in kind in January-October the plant slightly (by 0.9%) increased production of corrugated packaging, to 196.36 million square meters, being still second in terms of its production in the country after Rubizhne plant (together with Trypilsky packaging plant).
The rate of growth in the production of base paper for sanitary and hygienic products grew by almost 4.5%, to 71,600 tonnes, and production of toilet paper in rolls slowed down by 0.3%, to 370.75 million units.
Output of cardboard increased 3.5%, to 172,840 tonnes, in particular production of boxboard increased by 26.3%, to 57,230 tonnes, while package cardboard (including paper for corrugation) decreased 5%, to 115,630 tonnes.
Kyivsky cardboard paper mill is one of the largest cardboard and paper producers in Europe. It employs almost 2,200 people. It sells produce to almost 700 companies in Ukraine, some CIS member states and the rest of the world.
Ukraine’s economy will shrink by 3.5% in 2020 due to the coronavirus-related crisis, while the global economy will lose 5.2% overall, the World Bank announced this in the updated Global Economic Prospects on Tuesday. “The depth of the contraction will depend on the duration of the health crisis, progress on major pending reforms, and the ability to mobilize adequate financing to meet sizable repayment needs,” the World Bank said.
According to the bank, next year the growth of the Ukrainian economy will resume at a rate of 3%, which is lower than the expected recovery of the global economy at 4.2%.
The World Bank said that compared with the previous forecast in January of this year, it worsened expectations of the dynamics of Ukraine’s GDP this year by 7.2 percentage points (pp), and in the next – by 1.2 pp.
The growth of Ukraine’s economy in the fourth quarter of 2019 slowed down to 2.2% and will again exceed 3% in the first quarter of 2020, Dmytro Sologub, the Deputy Governor of the National Bank of Ukraine (NBU), has stated. “According to our estimates, behind the growth figure [GDP] of 3.3% in 2019 is the fourth quarter growth of 2.2% … Regarding the first quarter, we currently have an estimate of GDP growth above 3%,” he said at a briefing in Kyiv.
As reported, the NBU worsened the forecast for GDP growth in 2019 to 3.3% from 3.5% and kept it at 3.5% in 2020 and 4% in 2021.
Ukrainian government has to work to promote “sustainable optimism,” to do something the people would really believe in, said Economist Robert J. Shiller, 2013 Nobel Laureate in Economics. “We need the optimism that we see now in Ukraine to be sustainable. We do not look at the latest growth numbers as an indication of success, but we have to look at how the culture is changing,” the economist said at a Ukrainian breakfast hosted by the Victor Pinchuk Foundation in Davos. Shiller emphasized the importance of cultural change in Ukraine through education, especially regarding corruption perception.
“We do not look at the latest growth numbers as an indication of success, but we have to look at how the culture is changing,” the Nobel laureate said.
Chief Executive Officer of General Atlantic Bill Ford added that Ukraine was lucky to have a powerful education system and very strong engineering talents.
“But that talent has to believe in the opportunity and return to Ukraine and develop business here. Ukraine is going to see a generation of young people who will build digital businesses within Ukraine. I think that the thing that will really create enthusiasm and confidence for the country is young entrepreneurs who will build real businesses and real success in bringing technology in,” the expert noted.
He emphasized that other components of success are the fight against corruption and the rule of law.
“Ukraine’s problem with the corruption is not so much the corruption itself but the perception of corruption,” Co-Founder and Co-Executive Chairman of The Carlyle Group David M. Rubenstein said at the Ukrainian breakfast in Davos. He explained that many investors eager to invest in emerging markets because they are seeking higher rate of investment return are afraid of being criticized because even though you did nothing wrong, because of that perception of the corruption, people would think you do something wrong.
“I think, Ukraine has to work on its image as well as the reality. I think that the government is interested in attracting foreign capital and getting rid of the perception of corruption as well as the reality,” he added.
Businessman and philanthropist Victor Pinchuk also emphasized that Ukraine, along with continuing reforms and confronting Russian aggression, needs to build a strong narrative.
“Many agree that in terms of reforms and defending against the aggression, Ukraine’s leadership does a job that is not bad at all. The narrative is also crucial. We must be everywhere and show simply the truth. It is not all white but much whiter than the stereotype,” Pinchuk said.