News eng
Ukraine Business News, Tuesday, January 7
- Gov’t Borrowing Gets Cheaper, Longer
- Poles Loan $100 Million to Build Shopping Centers in Kyiv, Kharkiv
- Half a Million ‘New’ Cars Hit Ukraine’s Streets in 2019
Ukraine’s state and state-guaranteed debt of Ukraine fell last year to 52% of GDP, from 63% at the start of the year, reports the Finance Ministry. The Ministry’s goal is 45% at the end of this year, and 40% at the end of 2024. During 2019, the debt actually grew by 6%, from $78 billion to $83 billion. But Ukraine’s economy grew by about 3.5%. The hryvnia’s 15% appreciation against the dollar, also served to increase the dollar equivalent figure for Ukraine’s hryvnia economy.
With foreign investor interest strong in Ukraine’s government debt, the share of government hryvnia-denominated debt increased last year from 33% to 41%. Yields on government hryvnia bonds fell sharply: by 7.22 percentage points to 11.78% for three-month government bonds; and by 7.08 percentage points to 11.42% for 1-year government bonds. The weighted average term of government hryvnia debt bonds increased: from nine months in 2018 to two years in 2019.
Privatization failed last year, netting only 3% of the forecast budgeted amount. The amount earned – $23 million – barely covered the budget of the agency in charge of the program, the State Property Fund. Kyiv judges held up sales last year, a resistance that vanished after the landslide electoral wins of Zelenskiy, a strong advocate of selling state companies.
The strong hryvnia has depressed the hryvnia value of Ukraine’s export revenues, contributing to a $1.6 billion gap between revenue projections and the amount actually collected, reports Bloomberg in an article titled: “World-Beating Currency Gives Ukraine a Budget Headache.” The government has ordered the Finance Ministry to reduce some development spending, reports Ekonomichna Pravda news site, citing documents it obtained. The IMF insists that the government budget deficit stays below 2% of GDP. In 2019, it was $3 billion, or 1.8% of GDP.
A Polish development bank has granted a €53.6 million loan for the construction of a shopping center in Kharkiv, its second Ukraine project in a year. Bank Gospodarstwa Krajowego, or BGK, is financing the construction of Nikolskiy shopping center by Unibep SA, one of Poland’s largest construction companies. Polish Export Credit Insurance Corporation, or KUKE, is insuring the project, which is to have 40% Polish materials and services. With Poland increasingly supplanting Russia as Kharkiv’s international partner, Kharkiv airport now has direct flights to six Polish cities.
