Business news from Ukraine

Main macroeconomic indicators of Ukraine and the world for the beginning of 2024 from Experts Club

The article collects and analyzes the main macroeconomic indicators of Ukraine. In connection with the entry into force of the Law of Ukraine “On Protection of the Interests of Economic Entities during Martial Law or State of War” the State Statistics Service of Ukraine suspends the publication of statistical information for the period of martial law, as well as for three months from the date of its completion.

The exception is the publication of information about the consumer price index, separate information on statistical indicators of 2021 and for the period January-February 2022. The article analyzes open data from the State Statistics Committee, the National Bank and analytical centers.
Maxim Urakin, PhD in Economics, presented an analysis of macroeconomic trends in Ukraine and the world based on official data from the State Statistics Committee of Ukraine, the NBU, the UN, the IMF and the World Bank.

Macroeconomic indicators of Ukraine

Maxim Urakin cited data from the National Bank of Ukraine on the improvement of the financial situation in 2023 compared to 2022.

“Last year was marked by more favorable macroeconomic conditions for the financial industry. GDP growth generally exceeded forecasts, and inflation rates declined. Even after the downgrade, the discount rate remains high enough to make hryvnia investments attractive. Thanks to the efforts of the National Bank and market readiness, the transition to a policy of managed flexibility of the hryvnia exchange rate was successful. At the same time, this success was ensured primarily by stable receipts from partners within the framework of macrofinancial assistance and an increase in the share of exports of agricultural products,” Urakin emphasized.

The expert noted that the main risks for the economy remain the duration of the war and instability of international aid.

“In the third quarter of 2023, Ukraine’s GDP growth slowed to 8.2%. The negative balance of foreign trade increased by 3.2 times, which is a worrying signal. Public debt has slightly decreased compared to August figures, but already in 2024 it may exceed the country’s GDP for the first time, which poses significant risks to economic stability,” the economist said.

The pace of international aid to Ukraine, in turn, has fallen significantly in Q4 2023 – Q1 2024, which could negatively affect the economic recovery this year amid the war.

Global Economic Outlook

Maxim Urakin also analyzed the global economy, noting a slowdown in growth in 2024 to 2.2%.

“The analysis of global GDP dynamics shows that the global economy continues to recover from the pandemic, but geopolitical instability has a restraining effect on this growth. According to Maxim Urakin, it is important to monitor developments and adapt to changing conditions to ensure sustainable economic growth in the future. Ukraine, in this context, needs to focus on strengthening domestic political stability, restoring its economic potential and continuing reforms to improve its post-war prospects and strengthen its position on the global stage,” the expert explained.

According to the expert, the current macroeconomic situation in Ukraine and the world requires further analysis. For Ukraine, the main challenges in the coming years will be the need to rebuild Ukraine after the war and public debt management.
Earlier, the Experts Club analytical center released a video on how the GDP of countries has been changing in recent years, more detailed video analysis is available here.

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Main economic indicators of Ukraine and the world from Experts Club

The article collects and analyzes the main macroeconomic indicators of Ukraine. In connection with the entry into force of the Law of Ukraine “On Protection of the Interests of Economic Entities during Martial Law or State of War” the State Statistics Service of Ukraine suspends the publication of statistical information for the period of martial law, as well as for three months from the date of its completion. The exception is the publication of information about the consumer price index, separate information on statistical indicators of 2021 and for the period January-February 2022. The article analyzes open data from the State Statistics Committee, the National Bank and analytical centers.

Maxim Urakin, PhD in Economics, analyzed macroeconomic trends in Ukraine and the world based on official data from the State Statistics Committee of Ukraine, the NBU, the UN, the IMF and the World Bank.

Macroeconomic Indicators of Ukraine

Maxim Urakin cited data from Ella Libanova, director of the Institute of Demography and Social Research, which suggests that about 50% of citizens will return after the war.

“Demography is an important factor for economic recovery, but the threat of depopulation and labor shortage cannot be ignored. In the medium term, the reduction of demographic growth potential in Ukraine is compensated only by migration,” Urakin emphasized.

The expert noted that the main risks for the economy remains the duration of the war and instability of international aid.

“In the third quarter of 2023, Ukraine’s GDP growth slowed to 8.2%. The negative balance of foreign trade increased by 3.2 times, which is a worrying signal. Public debt has slightly decreased compared to August figures, but in 2024 it may exceed the country’s GDP for the first time, which poses significant risks to economic stability,” the economist said.

Prospects for the Global Economy

Maxim Urakin also analyzed the global economy, noting a slowdown in growth in 2024 to 2.2%.
“One of the key reasons for the slowdown in global economic growth is the decline in GDP rates in developed countries. We have seen the lowest GDP upturn in advanced economies since the 1980s, excluding the periods of the global financial crisis and the COVID-19 pandemic. The unprecedented cycle of interest rate hikes by major central banks in recent years has also played a significant role in slowing growth. This increase in rates is caused by the need to control inflation, but at the same time it limits economic activity,” the expert explains.
According to the expert, the current macroeconomic situation in Ukraine and the world requires further analysis. For Ukraine, the main challenges in the coming years will be the need to rebuild Ukraine after the war and the management of public debt.

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Ukraine exports $36 bln worth of goods in 2023

Exports of goods from Ukraine in 2023 fell by 18.5% year-on-year – from $44.2 billion to $36 billion, while imports increased by 14.4% – from $55.5 billion to $63.5 billion, the State Customs Service said on Friday.

As a result, according to its data, Ukraine’s foreign trade turnover for 2023 decreased by only 0.3% to $99.4 billion.

It is specified that taxable imports amounted to $52.6 billion, or 83% of the total volume of imported goods. It is noted that the tax burden per 1 kg of taxable imports in 2023 increased by 38% to $0.49/kg.

According to the released data, the most imported goods to Ukraine were China – in the amount of $10.4 billion, Poland – $6.6 billion and Germany – $4.9 billion, while the most exported were Poland – $4.7 billion, Romania – $3.7 billion, as well as China – $2.4 billion.

In the total volume of imported goods in 2023, 65% were machinery, equipment and transport – $19.8 billion (during customs clearance of such goods, UAH 141.7 billion or 31% of customs payments were paid to the budget), chemical products – $11 billion (UAH 74.8 billion or 16% of customs payments were paid to the budget) and fuel and energy products – $10.3 billion (UAH 103.4 billion or 23% of customs payments).

The top 3 exports from Ukraine in 2023 were food products – $21.8 billion, metals and metal products – $3.9 billion, as well as machinery, equipment and transport – $2.9 billion

The State Customs Service specified that 559.2 million UAH was paid to the budget during customs clearance of exports of goods for which the export duty was established.
For more details on the situation in the Ukrainian and global economy, see the video on the YouTube channel “Club of Experts” at the link:
https://www.youtube.com/watch?v=byJnfmie7bM
Subscribe to the channel here: https://www.youtube.com/@ExpertsClub

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Negative balance of Ukraine’s foreign trade increased 2.8 times

The negative balance of Ukraine’s foreign trade in goods in January-November 2023 increased 2.8 times compared to the same period of 2022 – to $24.351 billion from $8.570 billion, the State Statistics Service (Gosstat) said on Monday.
According to its data, exports of goods from the country during the period decreased by 18.9% compared to January-November 2022 – to $32.978 billion, while imports increased by 16.5% – to $57.329 billion.
The State Statistics Committee specified that in November-2023 compared to October-2023, seasonally adjusted exports increased by 3.1% to $2.583 billion, while imports decreased by 9.5% to $4.749 billion.
The seasonally adjusted foreign trade balance in November-2023, as in the previous month, was negative at $2.166 billion compared to $2.741 billion before.
The export-import coverage ratio in January-November 2023 was 0.58 (0.83 in January-November 2022).
State Statistics specified that foreign trade operations were conducted with partners from 228 countries.
For more details on the situation in the Ukrainian and global economy, see the video on the YouTube channel “Club of Experts” at the link:
https://www.youtube.com/watch?v=byJnfmie7bM
Subscribe to the channel here: https://www.youtube.com/@ExpertsClub

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Maksim Urakin, Founder of Experts Club, analyzes macroeconomic trends in Ukraine and world at end of 2023

In a new episode of the Experts Club YouTube channel, Maksim Urakin, PhD in Economics, presented an analysis of macroeconomic trends in Ukraine and the world based on official data from the State Statistics Service of Ukraine, the NBU, the UN, the IMF, and the World Bank.

Macroeconomic Indicators of Ukraine
Maksim Urakin cited data from Ella Libanova, Director of the Institute for Demography and Social Studies, who estimates that about 50% of citizens will return after the war.
“Demographics is an important factor for economic recovery, but the threat of depopulation and labor shortages cannot be ignored. In the medium term, the decline in the demographic growth potential in Ukraine can only be offset by migration,” Urakin emphasized.
The expert noted that the main risks to the economy remain the duration of the war and the instability of international aid.
“In the third quarter of 2023, Ukraine’s GDP growth slowed to 8.2%. The negative balance of foreign trade increased 3.2 times, which is an alarming signal. The public debt has slightly decreased compared to August figures, but in 2024 it may exceed the country’s GDP for the first time, which poses significant risks to economic stability,” the economist said.

Prospects for the Global Economy
The founder of Experts Club also analyzed the global economy, noting a slowdown in growth in 2024 to 2.2%.
“One of the key reasons for the slowdown in global economic growth is the decline in GDP in developed countries. We are witnessing the lowest GDP growth in developed countries since the 1980s, with the exception of the global financial crisis and the COVID-19 pandemic. The unprecedented cycle of interest rate hikes by major central banks in recent years has also played a significant role in slowing growth. These rate hikes are driven by the need to control inflation, but at the same time, they limit economic activity,” the expert explains.
According to the expert, the current macroeconomic situation in Ukraine and the world requires further analysis. For Ukraine, the main challenges in the coming years will be the need to restore Ukraine after the war and manage the public debt.

For more information on the situation in the Ukrainian and global economy, please see the video on the YouTube channel “Club of Experts” at the link: https://www.youtube.com/watch?v=byJnfmie7bM

You can subscribe to the channel here: https://www.youtube.com/@ExpertsClub

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Ukraine’s external gross debt rose to 92.7% of GDP – NBU

The volume of Ukraine’s gross external debt increased by $8.8bn during the second quarter of this year and amounted to $148.6bn at the end of the half-year, according to the website of the National Bank of Ukraine (NBU).
“Relative to GDP, the debt increased from 90.5% to 92.7%,” the National Bank noted.

At the same time, the external debt of the public sector for the second quarter of 2023 increased by $8.4 billion to – $84.5 billion (52.7% of GDP), while the debt of the private sector – by $0.4 billion to $64.1 billion (40% of GDP).

As indicated by the National Bank, the growth in the public sector was due to net attraction of $8.8 billion in loans from international partners, including $3.6 billion from the International Monetary Fund (IMF), while the government debt on securities decreased by $0.12 billion.

According to the central bank, the volume of external liabilities of Ukrainian banks decreased by $0.08bn to $1.8bn (1.1% of GDP), mainly due to the reduction of debt on loans by a similar amount.
External debt of other sectors of the economy increased by $0.2bn to $41.3bn (25.8% of GDP). As explained by the regulator, this was due to the growth of external debt on guaranteed loans – by $0.14 billion and securities – by $0.05 billion.
Debt of other sectors of the economy, including intercompany debt, increased by $0.52 billion to $62.3 billion (38.9% of GDP) in the reporting quarter.

Direct intercompany debt of enterprises in direct investment relations increased by $0.28 billion to $21 billion (13.1% of GDP) in the quarter due to the increase in external debt on credits and loans of direct investors by $0.26 billion.

The NBU estimated the increase in private sector debt due to exchange rate changes at $0.4 bln.
The volume of overdue debt of the real sector on non-guaranteed loans (including from direct investors) increased by $0.13bn in April-June and amounted to $25.4bn (15.9% of GDP) at the end of the second quarter. According to the NBU, the share of Cyprus in it is 58.1%. In addition, the shares of the UK increased by 1 percentage point (p.p.), to 9.2%, and the Netherlands – by 3 p.p., to 5.8%.

According to the National Bank, Cyprus at the end of the second quarter remained the main creditor country in terms of the geographical structure of private sector debt on non-guaranteed loans (together with intercompany debt) – 49.2% of the total volume, its share since the beginning of the year increased by 0.4 p.p.

The shares of the Netherlands, Germany and Switzerland increased by 0.1 pp. to 7.3%, 3.0% and 2.6% respectively, while the share of the USA remained at 3.0% and the shares of the UK and Luxembourg decreased by 0.1 pp. – to 10.7%.

The main currency of Ukraine’s external borrowings at the end of Q2 2023 remains the US dollar – 50% of total external debt, but its share decreased by 3 p.p. over the quarter. At the same time, the share of borrowings in euros increased from 31.9% to 33.8%, as well as in SDRs to the IMF – from 9.9% to 11.4%, while the share of external debt in hryvnia decreased by 0.2 p.p. to 1.6%. – to 1.6%.
The volume of short-term external debt by residual maturity for the second quarter of 2023 increased by $1.2 billion and amounted to $40.8 billion as of June 30, 2023.

Meanwhile, general government liabilities that require repayment over the next 12 months increased by $0.9 billion to $3.8 billion due to higher future government loan repayments, including $0.2 billion to the IMF, while central bank repayments decreased by $0.18 billion to $1.3 billion due to lower IMF repayments.
The volume of short-term liabilities of the banking sector remained almost at the level of the previous quarter and amounted to $1.3 bln.

The total volume of real sector borrowings (together with intercompany debt), which are to be repaid over the next 12 months, increased by $0.5bn and amounted to $34.4bn as of June 30, 2023. The National Bank specified that the growth is due to an increase in the volume of future repayments on debt securities by $0.4bn.

Experts Club research project and Maxim Urakin recently released an analytical video about the economy of Ukraine and the world.

Subscribe to the Experts Club YouTube channel by clicking here – https://www.youtube.com/@ExpertsClub

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