Ukraine’s GDP growth will reach 3.2% in 2020 with a further acceleration to 3.6% in 2021, Morgan Stanley predicts.
Since the prospect of land reform is becoming more defined, the bank is raising its forecast for the economic growth of Ukraine and the hryvnia exchange rate. Now it expects GDP growth by 3.2% in 2020 with a further acceleration to 3.6% of GDP in 2021. The bankers also forecast the hryvnia exchange rate of UAH 26.5/$1 at the end of 2019 and UAH 27.5/$1 by the end of 2020.
According to the report, Morgan Stanley also expects the first tranche from the International Monetary Fund for Ukraine before the end of this year, which could follow the adoption of the law on the national budget of Ukraine for 2020.
President of Ukraine Volodymyr Zelensky has proposed turning the Chornobyl zone into one of the points of economic growth in Ukraine.
“Today I’ve signed a decree that will be the beginning of transformation of the exclusion zone into one of the growth points for new Ukraine,” he said at Chornobyl Nuclear Power Plant, where the ceremony of transferring a new safe confinement will take place.
The Ukrainian designer of software Intellias is mulling a possibility of acquiring some companies for further growth, including companies with development centers in Eastern Europe, the co-founder and Board Chairman of Intellias Mykhailo Puzrakov has said in an interview with Die Welt. “So far we have grown organically. I believe, however, that maybe even next year we could start to consider some acquisitions. We are interested in companies that could interact with Intellias: companies with development centers in Eastern Europe, or companies with a client base that could complement ours. In addition, we will consider companies that have some experience or products that will help us gain new customers,” he said.
Puzrakov also announced plans to expand the company’s presence in Berlin next year – now only one employee works in the Berlin office of Intellias.
According to him, today one of the main advantages of Intellias is the ability to quickly scale the team, which is often required by their European customers.
Puzrakov also said that the company has ceased to be a startup, moving into the category of a successful and profitable business, but is still at the beginning of the growth stage.
Intellias was founded in Lviv in 2002. Its offices are located in Kyiv, Lviv, Odesa, Kharkiv and Berlin.
Acting Head of the State Employment Service of Ukraine Valeriy Yaroshenko has said that the amount of employed population in Ukraine grew by 0.9% year-over-year.
“We are witnessing that the labor market is actually demonstrating some kind of stabilization for the first half of 2018. The growth in the employment of the population for us, according to the state statistics, occurred for the first time since 2013,” he told a news conference in. According to Yaroshenko, in comparison with the corresponding period of the previous year the number of employed population in Ukraine increased by 149,000 people (by 0.9%), and the unemployment rate is 9.7%.
At the same time, he said that 21.8% of Ukrainians work in the shadows, while last year there were 22.3% of them.
“We have 304,000 people registered with the State Employment Service today,” Yaroshenko said.
According to him, 47% of them have higher education, and in the cities of Kyiv, Odesa, Kharkiv, Sumy and Lviv in employment centers from 85% to 90% of the unemployed people have higher education.
“As of July 27, compared with the same date in 2017, the number of unemployment assistance recipients in the country is 23,000, which is 8% less than it was in 2017,” he said.
In addition, he said that the average amount of assistance payments is growing in the country. Thus, minimum assistance under the law is UAH 544 per month, and 25% of the unemployed receive it, and the maximum is UAH 7,048, and 5% unemployed (last year 3%) receive it.
“The number of vacancies has significantly increased over the past year, we now have about 130,000 vacancies in the database,” the head of the State Employment Service said.
At the same time, he pointed out the existence of a large imbalance in the labor market between the vacancies offered and the demand of applicants.
Yaroshenko said that at the moment the employment market in Ukraine most in need of locksmiths, electric welders, turners, bakers, drivers, salesmen, cooks, waiters, nurses, tractor drivers and agricultural machinery servicemen.
“We for half a year were able to retrain and raise the qualification of 88,000 unemployed,” Yaroshenko said.
Industrial production in Ukraine in April 2018 increased by 3% compared with April 2017, while the figure in March 2018 year-over-year was 1%, it was 1.9% in February 2018 and 3.6% in January 2018, the State Statistics Service said on Wednesday.
The authority said that with the adjustment to the effect of calendar days, industrial production in April 2018 rose by the same 3% compared with April 2017, whereas growth in March 2018 from March 2017 was by 1.6%.
Industrial production in April 2018 from March 2018 decreased by 5%, and the drop was 0.6% if the seasonal factor is taken into account.
In January-April 2018, industrial production growth accelerated to 2.6% from the same period of last year, against 2.4% in the first three months. In particular, the mining industry showed an increase from 2.3% to 3.1%, the supply of electricity, gas and steam grew from 2.1% to 3.6%. However, the processing industry demonstrated a slowdown from 2.5% to 2.2%.
The processing industry in April 2018 from April 2017 increased production by 0.8%, the mining industry by 5.6%, while in the supply of electricity, gas and steam grew by 8.6%.
In Luhansk region industrial production grew by 3% in April 2018 year-over-year, and in Donetsk region – by 11.5%.
Growth in industrial production in April 2018 was seen in Ivano-Frankivsk (14.8%), Volyn (8.3%), Poltava (8%), Sumy (6.4%), Kyiv (4%), Cherkasy and Chernivtsi (6.1% each) regions.
As reported, industrial production in Ukraine in 2017 fell by 0.1% after growth by 2.4% in 2016. The decline of 13% was seen in 2015, 10.1% in 2014, 4.3% in 2013 and 0.7% in 2012.
The European Bank for Reconstruction and Development (EBRD) has left unchanged its forecast for Ukrainian economy growth in 2018 at 3% and expects that the same pace would be retained in 2019, the bank has said in a survey on its website. The bank said that large foreign exchange debt repayments by the public sector falling due in 2018-20 and the forthcoming presidential and parliamentary elections cycle in 2019 represent important risks to the growth outlook.
Continuation of the IMF (the International Monetary Fund) programme is uncertain due to the lacking commitment on the part of the authorities to meet key reform requirements, the bank said.
The EBRD said that the growth of Ukrainian economy remains subdued.
As reported, the World Bank remained unchanged its forecast for Ukraine’s GDP growth in 2018-2019 at 3.5% and 4% respectively.
However, the bank said that if reforms are delayed, growth could drop below current levels in an uncertain macroeconomic environment as financing risks rapidly increase and GDP growth could slow to 2%.
The IMF retained its forecast for Ukraine’s GDP growth in 2018 at 3.2%, while it reviewed downwards the forecast for 2019 to 3.3% from 4%.
The National Bank of Ukraine (NBU) predicts that Ukraine’s GDP would accelerate in 2018 to 3.4% from 2.5% in 2017 and slow to 2.9% in 2019-2020.