Business news from Ukraine

MACRO MONTHLY SUMMARY, MAIN STATISTICS OF UKRAINE IN APRIL 2020

Bank of America (BofA) analysts expect a decline in Ukraine’s GDP in 2020 by 5.6%, according to a review of the investment bank.
Prime Minister Denys Shmyhal during Freedom of Speech of Savik Shuster program on Ukraine TV Channel later on Friday presented a brief strategy of gradual weakening of the quarantine for the period from early May to early July.
The decline of Ukraine’s real GDP in 2020 could be 6-8%, the ICU investment group has said.
The lack of government support for the creative industry during the quarantine period can lead to massive unemployment in the industry and a drop in GDP, Head of the Verkhovna Rada committee for humanitarian and information policy MP Oleksandr Tkachenko has told Interfax-Ukraine.
Fitch Ratings has revised the Outlook on Ukraine’s Long-Term Foreign-Currency Issuer Default Rating (IDR) to Stable from Positive and affirmed the IDR at ‘B’.
The National Bank of Ukraine (NBU) has worsened the forecast of the balance of payments in 2020 to a deficit of $1.1 billion from a surplus of $3.2 billion, but expects its surplus to be restored as early as 2021.
The National Bank of Ukraine (NBU) revised downwards the assessment of the pace of real GDP of Ukraine for 2020 from 3.5% growth to 5% decline, while improving the expectations for its growth in 2021 from 4% to 4.3%.
Ukrainian President Volodymyr Zelensky has urged the Ukrainians to continue observing quarantine restrictions throughout the May holidays so that the state authorities could begin softening the quarantine starting May 11
The drop in gross domestic product (GDP) of Ukraine in January-February 2020 amounted to 0.2%, the Ministry of Economic Development, Trade and Agriculture said.
Ukrainian Prime Minister Denys Shmyhal has said that the Cabinet of Ministers will present its plan and steps to restore the economy after the turning point in the development of the coronavirus disease (COVID-19) pandemic is seen and which the country is moving towards in a moderate and smooth pace.
The International Monetary Fund (IMF) expects that Ukraine’s GDP would fall by 7.7% in 2020 and grow by 3.6% in 2021, according to the World Economic Outlook published by the IMF on Tuesday.
Consumer prices in Ukraine in April grew by 0.8%, the State Statistics Service has reported.
At the same time, in April last year, price growth was higher: it was 1%, therefore, inflation in April 2020 year-over-year slowed to 2.1% from 2.3% in March and 4.1% in 2019 .
The Board of the National Bank of Ukraine has decided to cut the key policy rate from 10% to 8%, the NBU said. The NBU expects that the key policy rate to be reduced further, to 7% in the current year.
Industrial production in Ukraine in March 2020 decreased by 7.7% compared to March 2019, while in February the decline was 1.5%, in January 5.1%, in December 2019 also 7.7%, the State Statistics Service has said.

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MACRO MONTHLY SUMMARY, MAIN STATISTICS OF UKRAINE IN MARCH 2020

Ukraine’s GDP in January 2020 decreased 0.5%, the Ministry of Economic Development, Trade and Agriculture has said based on information from the State Statistics Service.
The international rating agency Standard&Poors has affirmed Ukraine’s long-term foreign and national currency ratings at “B” level, short-term “B” ratings and ratings on the national scale “uaA,” the outlook on them is “stable.”
The deficit of the national budget of Ukraine in 2020 could increase from 2.09% to 7% of GDP, Yulia Kovaliv, the deputy head of the President’s Office, has said.
Analysts from Bank of America (BofA) at the end of last week worsened the assessment of prospects for the Ukrainian economy in 2020 and expect a decrease in the country’s GDP by 1.1% due to the increased interruptions in its work.
The deficit of Ukraine’s national budget in January-February 2020 was UAH 21.5 billion, including a deficit of UAH 26.13 billion for the general fund, with the target being UAH 30 billion, according to the State Treasury Service.
According to the agency, borrowings for the specified period amounted to UAH 65 billion with the target standing at UAH 85 billion, repayment to UAH 51 billion with a plan of UAH 59 billion.
Ukraine’s GDP could fall by over 0.5% in February 2020, Deputy Economic Development, Trade and Agriculture Minister of Ukraine, Taras Kachka, who is also the Trade Representative of Ukraine, has said.
The Ministry of Economic Development, Trade and Agriculture of Ukraine intends to worsen its macroeconomic forecast for 2020-2023 over the weakening of the pace of growth of the Ukrainian economy compared with the document approved in October 2019, the ministry has told Interfax-Ukraine.
The international rating agency Standard&Poors has affirmed Ukraine’s long-term foreign and national currency ratings at “B” level, short-term “B” ratings and ratings on the national scale “uaA,” the outlook on them is “stable.”
The National Bank of Ukraine (NBU) is counting on financing the national budget deficit that has grown due to coronavirus (COVID-19) outbreak at the expense of the International Monetary Fund (IMF), central bank governor Yakiv Smolii has said.
Ukraine’s GDP will decline by 4% if quarantine lasts up to three months and by 9% if it lasts longer, Head of Dragon Capital investment company Tomas Fiala has said.
Ukraine’s economy is better prepared for the crisis and its decline will be at the level of other countries, Deputy Governor of the National Bank of Ukraine (NBU) Dmytro Sologub has said.
Analysts of J.P. Morgan forecast an economic fall in Ukraine at 2.6% of GDP in 2020, calling the condition for such a relatively small reduction the signing of an agreement with the IMF and expecting it in the second quarter of this year.
The macroeconomic forecast, on which the amendments to the national budget were based, implies a drop in the economy in 2020 by 4.8% of GDP, Prime Minister of Ukraine Denys Shmyhal has said.

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MACRO MONTHLY SUMMARY, MAIN STATISTICS OF UKRAINE IN FEB 2020

The share of shadow operations in Ukraine in 2018 amounted to 23.8% of GDP, or UAH 846 billion, according to preliminary results of an Ernst & Young study supported by Mastercard, published by the National Bank of Ukraine (NBU).
The receipts of the general fund of Ukraine’s national budget totaled UAH 42.6 billion in January 2020, which is UAH 13.8 billion less than the monthly target, thus it was met by 76%, the Finance Ministry has reported, referring to tentative data from the State Treasury Service of Ukraine.
Morgan Stanley has improved the forecast for the growth of the Ukrainian economy in 2020 to 3.6% of GDP from 3.2% of GDP in the October forecast, according to the bank’s report available to Interfax-Ukraine.
The potential reintegration of Donbas might add up to 1.5 percentage points (pp) to Ukraine’s GDP growth during two or three years, Bank of America (BofA) has said in its analytical review.
The growth of gross domestic product (GDP) of Ukraine in October-December 2019 amounted to 1.5% compared to the same period in 2018, while in the previous quarters the growth rate was higher: 4.1% in the third, 4.6% in the second and 2.5% in the first.
Growth of Ukraine’s GDP in 2019 slowed from 3.4% in 2018 to 3.3%, while the drivers of this growth have changed, the Ministry of Economic Development, Trade and Agriculture of Ukraine said.
Capital investments in Ukraine in 2019 increased by 15.5%, while in 2018 their growth was 16.4%, and a year earlier some 22.1%, the State Statistics Service has said.
The surplus of Ukraine’s foreign trade in services in 2019 increased by 63.5% compared to 2018, to $8.71 billion, the State Statistics Service has said.
Inflation in Ukraine in January 2020 amounted to 0.2% compared to 1% in January 2019, which led to its annual decline to 3.2% from 4.1%, the State Statistics Service has reported.
The National Bank of Ukraine (NBU) is creating a contact group of the monetary and foreign exchange markets for exchange of information and opinions among their participants regarding the real state of these markets and their development.
The total state debt of Ukraine in January 2020, due to the weakening of the hryvnia exchange rate by 5.2%, in U.S. dollar terms decreased by 1.1%, or by $940 million, to $83.43 billion, the Finance Ministry has said.
Industrial production in Ukraine in January 2020 decreased by 5.1% compared to January 2019, while in January last year a decrease of 3.3% was recorded compared to the same month of the previous year, the State Statistics Service has said.
Ukraine since the beginning of the marketing year 2019/2020 (MY, July-June) and as of February 24, 2020 had exported 39.48 million tonnes of grain and legumes, which is 7.65 million tonnes more than on the same date of last MY.
Transport enterprises of Ukraine reduced cargo transportation by 12.3% in January 2020 compared to January 2019, to 44 million tonnes, the State Statistics Service has reported.
The volume of construction work in Ukraine in January-2020 increased by 3.6% compared with January 2019 and amounted to UAH 7.4 billion, in December 2019 compared to December a year earlier by 6.8%.
Ukraine has increased exports of IT services in 2019 by 30.2%, to $4.17 billion, according to a posting on the website of the IT Ukraine association, referring to data of Ukraine’s balance of payment.
Ukraine’s retail trade turnover in January 2020 in comparable prices increased by 12.1% compared with January 2019, the State Statistics Service has reported.

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MACRO MONTHLY SUMMARY, MAIN STATISTICS OF UKRAINE IN JAN, 2020

Goldman Sachs predicts the increase in inflation in Ukraine by 4.1% in 2019 and to 5% in 2020, according to the materials of the bank.
The inflation slowing in Ukraine in 2019 has turned out to be more significant than it was projected in the forecasts of the National Bank of Ukraine (NBU) published in inflation reports within 2019 (6.3% as of late 2019) and assessments of other expert organizations, the regulator has said in comments on inflation on its website.
The macroeconomic situation allows the Ukrainian economy to grow rapidly in the coming several years, Ukrainian Prime Minister Oleksiy Honcharuk has said.
Ukrainian businesses forecast inflation in 12 months at 7%, which is 0.1 percentage point (p.p.) worse than expected a quarter earlier.
The National Bank of Ukraine (NBU) has retained its forecast for real GDP growth in Ukraine for 2020-2021 at 3.5% and 4% respectively, expecting that GDP would grow by 4% in 2020.
According to the data of the electronic census, population of Ukraine totals 37.289 million, minister of the Cabinet of Ministers Dmytro Dubilet reported.
Real wages in Ukraine in December 2019 increased by 11.3% compared with December 2018, while compared with November 2019 they increased by 15.1%, the State Statistics Service has said.
According to the data of the electronic census, population of Ukraine totals 37.289 million, minister of the Cabinet of Ministers Dmytro Dubilet reported. “Ukraine amounts 37.289 million people,” Dubilet said at a press conference in Kyiv.
The deficit of Ukraine’s foreign trade in goods in January-November 2019 increased by 5.7% compared to the same period in 2018 (also $8.869 billion in deficit), to $9.374 billion, the State Statistics Service reported.
Exports of goods from Ukraine during the reporting period increased 6.3%, to $45.963 billion, while imports grew by 6.2%, to $55.337 billion, it said.
The deficit of Ukraine’s state budget for 2019 was UAH 78.05 billion with the ceiling set in the national budget being UAH 91.13 billion, while in 2018 the deficit of the national budget was UAH 59.25 billion with the ceiling of UAH 94.1 billion.
Industrial production in Ukraine in 2019 decreased by 1.8% compared to 2018, while in December 2019 from December 2018 the decline was 7.7%, the State Statistics Service has reported.
The volume of industrial products (goods, services) sold in Ukraine in January-November 2019 amounted to UAH 2.273 trillion, which is 0.5% more than in January-November 2018 (UAH 2.261 trillion), in particular outside the country to UAH 602.8 billion, the State Statistics Service has said.
The deficit of Ukraine’s state budget for 2019 was UAH 78.05 billion with the ceiling set in the national budget being UAH 91.13 billion, while in 2018 the deficit of the national budget was UAH 59.25 billion with the ceiling of UAH 94.1 billion.

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MACRO MONTHLY SUMMARY, MAIN STATISTICS OF UKRAINE IN OCT-NOV, 2019

The direct and state-guaranteed debt of Ukraine in 2020 will be reduced to 52.4%, Finance Minister of Ukraine Oksana Markarova has said.
The European Bank for Reconstruction and Development (EBRD) has reviewed upwards the expectations for the economic growth in Ukraine in 2019 from 2.5% to 3.3% and from 3% to 3.5% in 2020, according to the EBRD Regional Economic Prospects report.
The growth of Ukraine’s gross domestic product (GDP) in July-September 2019 amounted to 4.2% compared to the same period in 2018, while in the second quarter the growth rate was higher and amounted to 4.6%, in the first quarter it amounted to 2.5%.
The National Bank of Ukraine (NBU) estimates GDP growth in the third quarter of 2019 compared to the corresponding period of 2018 at 3.5%, according to the NBU’s inflation report.
The World Bank has improved the forecast for Ukraine’s GDP growth in 2019 from 3.4% to 3.6%, World Bank Senior Economist Anastasia Golovach has said.
Renaissance Capital investment company expects the potential growth of the Ukrainian economy thanks to the implementation of declared reforms by 2.5-2.7% and predicts the peak of GDP growth by 3.7% in 2021, while in 2019-2020 it could be 3.4%.
Analysts of JP Morgan have reviewed downwards the forecast for Ukraine’s GDP growth in 2019 from 4.3% in their October survey to 4%, and in 2020 they still predicts 3.8% GDP growth, according to their November survey.
The mission of the International Monetary Fund (IMF), working in Ukraine during November 14-22, has said that it had constructive and fruitful discussions with representatives of Ukrainian authorities, although more discussions in the near future are needed for signing the Staff Level Agreement.
Real wages in Ukraine on October 2019 increased by 9.2% compared with October 2018, while compared with September 2019 they decreased by 0.3%, the State Statistics Service has said.
The surplus of Ukraine’s foreign trade in services in January-September 2019 increased by 7% compared to the same period in 2018, to $4.228 billion, the State Statistics Service has said.
The deficit of Ukraine’s foreign trade in goods in January-September 2019 increased by 8.4% compared with January-September 2018, to $7.099 billion, the State Statistics Service has reported.
The deficit of the foreign trade balance of Ukraine for January-September 2019 amounted to $4.072 billion, which is 6.4% more than in January-September 2018 (a negative balance of $977.6 million), the State Statistics Service has reported.
Ukraine in January-October of 2019 decreased imports of aluminum ore and concentrate (bauxites) in natural terms by 0.9% compared to the same period in 2018, to 4.039 million tonnes.
Consumer prices in Ukraine in October 2019 increased by 0.7%, as in the previous month, after falling by 0.3% in August, Ukraine’s State Statistics Service has said.
The volume of cash in circulation in Ukraine for the ten months of 2019 decreased by 2.5% and amounted to UAH 390.1 billion by November 1, Viktor Zaivenko, the director of the money circulation department of the National Bank of Ukraine (NBU), has said at a briefing in Kyiv.
The deficit of the national budget for January-October 2019 was UAH 30.278 billion, while the deficit of the general fund of the national budget totaled UAH 35.373 billion, according to the website of the State Treasury Service of Ukraine.
The tax index of Ukraine in April-October 2019 worsened to 2.9 points out of 5, which is 0.08 points less compared with the figure of the previous six months, according to a study of the European Business Association (EBA).
Ukrainian banks have fully switched to the application of the International Bank Account Number (IBAN), the National Bank of Ukraine (NBU) has reported on its official website.
The National Bank of Ukraine (NBU) plans to launch transactions with derivatives in the second quarter of 2020, according to a presentation of open markets by the NBU on its website.
The total state (direct) and state-guaranteed debt of Ukraine in October 2019 decreased 1.4%, or by $1.13 billion, to $81.83 billion, according to data on Finance Ministry’s website.
Finance Minister of Ukraine Oksana Markarova has said that in two years Ukraine seeks to cut state debt to 40% of GDP and will strive for deficit-free budget in the future.
The volume of industrial products (goods, services) sold in Ukraine in January-September 2019 was UAH 1.877 trillion, which is 3.7% more than in January-September 2018 (UAH 1,810 trillion), in particular outside the country some UAH 504.429 billion, the State Statistics Service has said.
Industrial prices in Ukraine in October 2019 decreased by 1.2%, after falling by 1.5% in September and by 0.7% in August, the State Statistics Service has reported.
Ukraine as of November 28 had threshed 74.3 million tonnes of grain and leguminous crops from an area of 15 million hectares, exceeding the result of the grain harvest for the whole of 2018, when the gross harvest amounted to 70.1 million tonnes.
Ukraine since the beginning of the marketing year 2019/2020 (MY, July-June) and as of November 27, 2019 had exported 23.78 million tonnes of grain and legumes, which is 35.1% more than on the same date last MY.
Milk production in Ukraine in January-October 2019 (excluding the temporarily occupied territory of Crimea, Sevastopol, and the Joint Forces Operation (JFO) area) decreased by 3.6% compared to the same period in 2018, to 8.4 million tonnes.
The transport enterprises of Ukraine (excluding the territory of the Autonomous Republic of Crimea and Sevastopol, as well as part of the Joint Forces Operation area) in January-October 2019 increased cargo transportation by 8.8% compared to the same period in 2018, to 561.6 million tonnes, according to the State Statistics Service.
Ukraine’s transport enterprises in January-October 2019 carried 3.539 billion people, which was 5.6% less than in the same period in 2018, the State Statistics Service has reported.
The volume of construction work in Ukraine in October 2019 increased by 14.9% compared to October 2018, while in September 2019 compared to September 2018 this figure rose by 11.3%.
Ukrainian President Volodymyr Zelensky has set a task to by to develop an action plan to increase Ukraine’s position in the Doing Business ranking by the end of this year, as well as begin preparations for large-scale privatization and the introduction of the land market, the president’s press service said.
Retail trade turnover in Ukraine (legal entities and individual entrepreneurs) in January-October 2019 in comparable prices increased by 10.2% compared with January-October 2018, the State Statistics Service has said.
Consumer confidence of Ukrainian in October 2019 worsened first after presidential election and the Consumer Confidence Index (CCI) equaled 95.9 (the values of indices can vary from 0 to 200), which is 1.6 points lower, than the indicator in September, according to a survey of Info Sapiens posted on its website.

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MACRO MONTHLY SUMMARY, MAIN STATISTICS OF UKRAINE IN SEPT-OCT, 2019

The National Bank of Ukraine (NBU) has improved macro forecasts for 2019-2021: the assessment of real economic growth this year has been increased from 3% to 3.5%, in the next year from 3.2% to 3.5% and in 2021 from 3.7% to 4%. The Ministry of Economic Development, Trade and Agriculture has improved the assessment Ukraine’s GDP growth in 2019 from 2.8% announced in the May forecast to 3.5%, according to the updated macroeconomic forecast of the government.
The conservative estimate of the government provides for 12% GDP growth in Ukraine over three years, and the optimistic one for 17.8%, said MP Oleksiy Honcharenko (the European Solidarity parliamentary faction).
The World Bank, taking into account the results of H1 2019, has improved its forecast for gross domestic product (GDP) growth in Ukraine in 2019 from 2.7% to 3.4%, expecting that it would accelerate to 3.7% and 4.2% in 2020 and 2021 respectively.
Ukraine’s GDP growth will reach 3.2% in 2020 with a further acceleration to 3.6% in 2021, Morgan Stanley predicts.
The Verkhovna Rada of Ukraine at first reading adopted the draft national budget for 2020 (bill No. 2000), which is based on the spring macro forecast of the Ministry of Economy and provides for budget revenues in the amount of UAH 1.079 trillion, expenses some UAH 1.17 trillion with a deficit of 2.09%.
The Verkhovna Rada, Ukraine’s parliament, has endorsed an action plan for the Cabinet of Ministers of Ukraine.
Ukrainian President Volodymyr Zelensky at a meeting with Chairman of the Japan-Ukraine Parliamentary Friendship Association Eysuke Mori has discussed possibilities for deepening economic and investment cooperation between Ukraine and Japan, the press service of the Office of the President has reported.
The deficit of Ukraine’s foreign trade in goods in January-August 2019 increased 16.7% compared with January-August 2018, to $5.843 billion, the State Statistics Service has reported.
The current dynamics of consumer prices allows expecting a decrease in inflation in annual terms in October to below 7%, Governor of the National Bank of Ukraine (NBU) Yakiv Smolii has said.
Actual inflation in Ukraine in September 2019 was lower than the forecast of the National Bank of Ukraine (NBU) published in the Inflation Report (July 2019), the regulator’s website reported.
Consumer prices in Ukraine after a decline in August by 0.3% and in July by 0.6% grew by 0.7% in September, Ukraine’s State Statistics Service said on Wednesday.
The deficit of Ukraine’s national budget in January-September 2019 was estimated at UAH 20.675 billion, including UAH 26.12 billion, which is the deficit of the budget’s general fund alone, the State Treasury Service reported on Friday.
The deficit of the general fund of the national budget of Ukraine in January-September 2019 amounted to UAH 25.8 billion and was financed by borrowings, the Ministry of Finance said in a press release on the website.
The National Bank of Ukraine (NBU) has raised its forecast for the country’s international reserves at the end of this year from $21.7 billion to $22.9 billion, the next year from $22.8 billion to $23.9 billion.
The international reserves of Ukraine in September 2019, according to preliminary data, decreased by 2.6%, to $21.438 billion due to significant repayments on government debt, the National Bank of Ukraine (NBU) said on its website.
Industrial production in Ukraine in September 2019 decreased by 1.1% compared to September 2018 after a decrease of 1.7% in August and 0.2% in July, the State Statistics Service has reported.
Ukraine’s transport companies in January-September 2019 carried 3.167 billion people, which is 5.7% less than in the same period in 2018, the State Statistics Service has reported.
The volume of construction work in Ukraine in September 2019 increased by 11.3% compared to September 2018, while in August 2019 compared to August 2018 this figure rose by 8.9%.
Retail trade turnover in Ukraine (legal entities and individual entrepreneurs) in January-September 2019 in comparable prices increased by 9.8% compared with January-September 2018, the State Statistics Service has said.

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