The fall of the Ukrainian economy in 2022 will be about 33% according to the baseline scenario, in which the war will last for another month and a half at the most, Alexander Pecheritsyn, a leading analyst at Raiffeisen Bank (Kyiv), said.
“If the war lasts until the end of the year, then (GDP) could fall as much as 45%,” he said at a zoom conference on Tuesday.
Pecheritsyn specified that this is the bank’s third forecast since the beginning of the war. According to him, the initial decline in the economy was estimated at about 15% based on previous fast-moving conflicts in the world, for example, in Georgia. Then, in March, the bank estimated a decline as low as 24%, taking into account the gross regional product and the map of hostilities. In particular, as part of this analysis, a 34% decrease in this year’s crop is expected.
Serhiy Kolodiy, Chief Manager for Macroeconomic Analysis at Raiffeisen Bank, recalled that in 2014-2015, the fall in GDP was approximately 25% compared with pre-war Ukraine (in official statistics, data are compared only for controlled territories).
Pecheritsyn added that in terms of GDP, the bank estimates a 39% drop in private consumption due to the emigration of 15% of the population, lower incomes and negative consumer expectations.
According to him, domestic investment, which is the most vulnerable component, will fall by half this year under the baseline scenario.
“On the positive side, production relocation programs have little effect, but on the scale of the total output, of course, it is small,” the analyst said.
Speaking about inflation, Pecheritsyn noted that the bank still maintains its forecast for this year at 17% after 10% in the past. He explained that the volume of purchases by the National Bank of military bonds in the amount of UAH 60 billion is still within the limits of controllable, in addition, state control over prices and the freezing of utility tariffs affect.
In general, speaking about the work of analysts during the war, Pecheritsyn said that the bank began issuing weekly military reviews.
“War is a new challenge, we are no strangers to them, since there was a coronavirus two years ago. But the current (challenge) is much more difficult,” he stressed.
Pecheritsyn until February of this year served as chief economist at Credit Agricole Bank (Kyiv).
As reported, according to the World Bank, which before the war expected the Ukrainian economy to grow by 3.2% this year, it will fall by 45.1%. According to his report from early April, in 2023 the Ukrainian economy is expected to recover by only 2.1%, which is also worse than previous expectations of 3.5%.
The National Bank of Ukraine predicts a decline in the country’s GDP this year by at least a third, refusing to make more detailed estimates. The IMF expects a 35% decline.
The American postal service UPS has suspended its work in Ukraine.
As reported on its website, the decision was made “because of the situation in Ukraine.” Operations have also been halted in Belarus and Russia.
UPS provides mail service in 220 countries around the world.
American-based Coca-Cola Co., the world’s largest soft drink producer, along with the Coca-Cola Foundation and its global bottling partners, will provide around $15 million in aid to Ukraine, which has been militarily invaded by Russia’s aggressor nation.
Efforts to provide humanitarian assistance in the region will include donations of funds and products manufactured by the corporation, according to the company’s report for the first quarter of 2022.
“This funding will support further relief efforts by the Red Cross and other organizations operating in Ukraine and neighboring countries, helping millions of displaced people,” Coca-Cola said in a report.
In addition, the corporation provides urgent financial assistance to all its employees in Ukraine.
According to the report, on March 8, 2022, Coca-Cola announced the suspension of its activities in the Russian Federation in response to its armed aggression in Ukraine. This measure will tentatively reduce the corporation’s net revenue and operating profit for the year by 1-2%, and also reduce earnings per share by about $0.04/share.
The company’s net profit in January-March decreased by 23.5% compared to the same period last year, to $2.25 billion.
Coca-Cola’s quarterly revenue increased by 5%, to $9.02 billion from $8.6 billion a year earlier.
Sales of carbonated drinks increased by 4%, driven mainly by China, India and Latin America. Sales of juices, milk drinks and plant-based drinks increased by 3%. Sales of water, sports drinks, coffee and tea fell by 11%.
As reported, Coca-Cola on March 8 announced the suspension of business in Russia in connection with Russian aggression against Ukraine, while in Russia it owns 10 factories for the production of soft drinks and juices.
On February 24, the corporation announced a temporary shutdown of the plant in Kyiv and the evacuation of employees.
The Ministry of Social Policy says that since the introduction of martial law, more than two million people have registered as internally displaced persons.
“I know that now, when talking about internally displaced persons, they often talk about people who have moved after martial law. But the war has been going on for eight years, and the number of those who have been forced to leave their homes since 2014 and seek asylum in other regions of the country is higher. To date, the Unified Information Database on Internally Displaced Persons has information on 3.4 million people,” the ministry’s press service quotes the Minister of Social Policy.
It is noted that more than two million of them are people who were forced to move after the introduction of martial law.
According to the report, most people after the large-scale military invasion of Russia moved to Lviv, Dnipropetrovsk, Poltava, Vinnytsia and Kyiv regions.
Most internally displaced persons are registered in Donetsk, Luhansk, Kharkiv, Dnipropetrovsk and Kyiv regions.
The Ministry of Social Policy also reports that more than 225,000 people have registered as internally displaced persons through Diia.
The German company Rheinmetall applied to the German Federal Government with another application for the export of 88 tanks Type 1A5 Leopard to Ukraine, the Welt newspaper reported, citing documents provided by the manufacturer.
According to the edition, the application was submitted at the end of last week. Delivery could take place in a few weeks if German Chancellor Olaf Scholz decides.
In addition, earlier bids from Rheinmetall for 100 Marder armored personnel carriers and from Krauss-Maffei Wegmann Group for 100 PzH 2000 self-propelled howitzers were sent for approval.
It is noted that the decision on deliveries is approved by the Federal Security Council, which is headed by the chancellor. So far, Scholz has not agreed to direct deliveries of heavy weapons to Ukraine.
The cost of used Leopard 1A5 tanks, which can be delivered to Ukraine, is about EUR 115 million. Together with Marder BMPs and self-propelled howitzers, the amount of heavy weaponry aid to Ukraine could amount to more than EUR 2 billion.
All tariffs on goods coming to Britain from Ukraine under an existing free trade deal will be axed to help the Ukrainian economy, the British government announced on Monday.
London said tariffs would be reduced to zero and all quotas removed following a direct request from Ukraine’s President Volodymyr Zelenskiy, saying the move would provide a boost for Ukrainian businesses involved in key exports such as barley, honey, tinned tomatoes and poultry.
“We stand unwaveringly with Ukraine in this ongoing fight and will work to ensure Ukraine survives and thrives as a free and sovereign nation,” said British International Trade Secretary Anne-Marie Trevelyan.
Britain said currently the average tariff on Ukrainian imports was about 22%. It said the planned change had been offered on a non-reciprocal basis, but Kyiv was likely to match the British action
