Economy of Ukraine

GDP

Main article: GDP of Ukraine

Financial system

National debt

Main article: State Debt of Ukraine

External debt

2022: Deferral of payments for two years due to special operation of Russia

In August 2022, Ukraine received a delay in external debt of $19.6 billion.

Foreign creditors froze payments on international bonds until 2024 in order to prevent default in the country amid a military special operation, Russia but it is not yet clear how this will affect lending.

According to the Prime Minister of Ukraine Denis Shmygal, it will now be possible to save $5.8 billion on payments on external debt until 2024. The government said that the postponement of payments on external debt will make it possible to preserve the Ukrainian economy in a military conflict.

2019: Debt to Russia - $0.6 billion

with

Budget of Ukraine

Main article: Budget of Ukraine

Foreign exchange reserves

2024: Reserves cut to $37.052 billion

According to preliminary estimates of the National Bank of Ukraine (NBU), Ukraine's international reserves in February 2024 decreased by 3.8%, or $1.47 billion, to $37.052 billion.

"Such dynamics is due to currency interventions of the NBU to maintain exchange rate stability and debt payments of the country in foreign currency, which were partially compensated by income from international partners," the NBU explained on its website.

Among other factors determining the volume of reserves, the NBU called operations in the foreign exchange market: in February, the regulator's net sale of currency amounted to $1.51 billion, which is 1.4 times less than in the previous month.

The National Bank noted that in February $1.34 billion was transferred to the account of the Cabinet of Ministers in the NBU, and $1.13 billion was paid for servicing and repaying the public debt.

The Central Bank also indicated that the current volume of reserves was positively affected by the revaluation of the value of financial instruments, adding $199.5 million.

"The current volume of international reserves provides financing for 4.9 months of future imports," the regulator stated.

Earlier, the NBU in January lowered the forecast of Ukraine's international reserves at the end of 2024 to $40.4 billion from $44.7 billion and to $42.1 billion from $45 billion at the end of 2025.

2022: Plan to transport gold and foreign exchange reserves to Poland

In July 2022, against the background of the military special operation of Russia, it became known that the gold and foreign exchange reserves of Ukraine will be transported and will begin to be stored in Poland.

2020: $28.7 billion

In June 2020, Ukraine received from the IMF the first tranche of $2.1 billion. This was announced on June 12 by the Chairman of the National Bank of Ukraine Yakov Smoliy in his microblog on Twitter.

The head of the NBU clarified that the funds came not directly from the IMF, but from several countries - members of the fund in different currencies.

He also said that "the first tranche of the IMF, together with the relevant financial assistance from the EU, has already increased the international reserves [of the country] to $28.7 billion."

2019: Complete reliance on support from other countries

Despite the resumption of GDP growth, a decrease in the state budget deficit and current account, as well as a decrease in the level of public debt, in May 2019 Ukraine is still dependent on financial assistance from international organizations. The country does not have significant reserves of foreign currency, and the growth of foreign direct investment in the country's economy is hampered by investor concern about ineffective government management and restrictions on capital movements. At the same time, the IMF and the EU have set Ukraine a number of conditions that it must fulfill in order to continue to receive financial injections. Among these conditions are the fight against corruption, raising gas and heating prices, agricultural reform, increasing the efficiency of the tax system and restructuring a number of ineffective state banks and companies.

2018: Foreign exchange reserves $15.3 billion

National currency: hryvnia

Inflation

Main article: Inflation in Ukraine

Key rate

2024: Down to 14.5%

On March 14, 2024, the National Bank of Ukraine unexpectedly reduced the rate to 14.5% from 15%, citing a slowdown in inflation and an increase in expectations of foreign financial assistance to Kyiv.

"Further inflation declines, stable foreign exchange market conditions and positive developments in the outlook for foreign aid are setting the stage for an earlier resumption of the interest policy easing cycle."

2023: Rate cut to 15%

On December 14, 2023, Ukraine reduced the interest rate to 15% from 16%.

Earlier on July 27, 2023, Ukraine for the first time after the outbreak of the conflict in the southeast of the country reduced the key rate. Politicians cut the key rate by 3 percentage points to 22%. The Central Bank foreshadows a further rate cut and improves economic forecasts.

2022: Rate rises to 25%

On June 2, 2022, the National Bank of Ukraine raised the discount rate from 10 to 25%.

2021: Rate rises to 8.5%

In June 2021, Ukraine unexpectedly left its benchmark rate unchanged, defying concerns about soaring inflation and saying it thought the surge was temporary.

The Central Bank left the key rate at 7.5% on June 17, 2021, maintaining it after two consecutive increases. Later, the rate was still raised to 8.5%

That surprised most economists polled by Bloomberg, who projected a rate hike of up to 8% after the country's consumer price growth was the second-fastest in To Europe after Turkey.

In April 2021, the National Bank of Ukraine (NBU) raised the key rate by 100 bp. up to 7.5%.

"This step is aimed at gradually slowing inflation in the second half of 2021 and returning it to the 5% goal in the first half of 2022," the message says.

At the end of March, the growth of consumer prices in annual terms accelerated to 8.5%, and core inflation - to 5.9%

2020

Banks in Ukraine

Main article: Banks in Ukraine

Credit rating

In February 2014, Fitch reduced Ukraine's credit rating to pre-default - from "B-" to "CCC." The reasons for this then became political instability in the country and uncertainty in the Ukrainian currency. The agency also doubted that Russia would fully provide Ukraine with $15 billion. Interviewed in early February 2014, experts said that without a Russian loan, the Ukrainian economy would default.

In August 2014, the rating agency Fitch reduced Ukraine's sovereign rating in national currency from "B-" to "CCC." At the same time, the agency confirmed the issuer's default rating in foreign currency at the level of "CCC"^[1].

The rating of priority unsecured bonds in the national currency of Ukraine was downgraded from "B-" to "CCC," and in foreign currency remained at the level of "CCC."

In the first half of 2014, exports of Ukrainian products to Russia decreased by 24%, and a reduction in Russian gas supplies due to payment disputes will lead to a wide shortage of energy, Fitch said.

The solvency of the Ukrainian government also worsened. According to the agency's estimates, the consolidated budget deficit will reach 10% of GDP in 2014. Fitch also drew attention to the sharp depreciation of the hryvnia - it has fallen by more than 37% against the dollar since the end of 2013. In turn, the quality of the assets of the banking system also fell.

"The Ukrainian government has budgeted 30 billion hryvnia to support public and private banks and a deposit guarantee fund. However, Fitch believes that possible needs for additional capitalization may be higher, "the statement said

.

Translations

2023: Outflow of money from Ukraine doubled transfers from abroad

At the end of January 2024, the National Bank of Ukraine reported that Ukrainians who fled the country spend about $35 million from their accounts in Ukrainian banks abroad every day. At the same time, the constant outflow of funds from the country at the end of 2022 reached $20 billion, and in 2023 - $18 billion.

As the Deputy Head of the National Bank of Ukraine Sergey Nikolaychuk clarified at the end of January 2024, the volume of transfers from citizens from abroad over the past two years has decreased significantly. If in 2021 this figure was $14 billion, then in 2022 it decreased to $12.5 billion, and in 11 months of 2023 - to $10.6 billion, he added.

Escaped citizens of Ukraine spend about $35 million from their accounts in Ukrainian banks abroad every day

The exact number of those who left Ukraine was not disclosed. According to data released on July 4, 2023 by the Office of the UN High Commissioner for Refugees, there are 6,331,100 refugees from Ukraine in the world. Viktor Medvedchuk, chairman of the council of the Other Ukraine movement, in August 2023 cited calculations based on official data, according to which 19.4 million people lived in the territory controlled by Kyiv at the beginning of 2023, while there were de facto 17.9 million outside Ukraine. According to Ella Libanova, director of the Institute of Demography and Social Research of the National Academy of Sciences of Ukraine, the number of people who left the country together with labor migrants who left Ukraine before 2022 is 9 million people by the end of 2023.

Political analyst Alexander Dudchak, in a conversation with the Argumenty i Fakty newspaper, noted that it became a real problem for Ukraine that money is spent precisely from Ukrainian accounts, that is, they leave the country, but do not return either in currency or in hryvnia. Ukrainians leave the country as whole families, so it makes no sense for them to send some money to someone, the expert noted.^[2]

Mining

2023: Graphite, Uranium, Titanium, Iron, Manganese, Lithium Reserves

In 2023, Ukraine has large reserves of graphite - about 19 million tons with an average graphite content of 5-8% in ore.

Ukraine is among the top ten countries in the world in terms of uranium ore reserves and occupies a leading place in Europe. There are 22 uranium deposits in Ukraine, four of which are being developed.

The country is also in the top ten in terms of explored titanium reserves and provides 7% of global production. By 2023, about 28 fields have been discovered. Titanium is produced from six fields with a production volume of almost 900,000 tons of concentrate per year.

Ukraine also ranks sixth in the world in iron mining, seventh in manganese and kaolin mining, and 11th in zirconium silicate mining.

According to the European Commission, by 2025 the EU will be able to provide itself with lithium by 80% and expand cooperation in the field of raw materials with, Serbia, Albania Ukraine and other countries with significant reserves. lity

In 2023, lithium is not mined in Ukraine, but its reserves account for about a third of those proven in Europe.

Reserves of tantalum, niobium, beryllium were found in six deposits. The extraction of tantalum and niobium is still carried out only in non-commercial volumes as a related component of titanium placers.

Further prospects for the extraction of rare earths are largely related to the development of the Novopoltavskoye deposit of apatite ores. In Ukraine, there is one beryllium (Perzhanskaya) deposit with reserves of 15.3 thousand tons of beryllium oxide, as well as with the content of tantalum, niobium, zirconium, tin, molybdenum, lithium, zinc.

2022: World No. 11 in uranium mining with 100 tons

Businessmen

Billionaires in Ukraine

• Main article: Billionaires in Ukraine

Energy supplies

Gas market

• Gas market in Ukraine
• Gazprom's business in Ukraine

Oil pipelines

Main article: Druzhba oil pipeline

2022: Increase in imports of petroleum products by 72% amid Russia's military special operation

Imports of petroleum products by Ukraine in January - September 2022 amounted to $6.14 billion, which is 72.1% more ($3.57 billion in 2021) than in the same period last year, the country's State Customs Service said. The main importer is Belarus for $793.5 million, India - for $688.3 million and Russia for $590.4 million.

2018: Low gasoline price

Power

NPP

Main article: Energoatom NAEK

At the beginning of 2022, more than 50% of electricity in Ukraine is generated at nuclear power plants.

2023: Strikes of the Russian Armed Forces on power plants and the launch of all 9 power units of the remaining three nuclear power plants

To destroy all transformers in Ukraine, the Russian Armed Forces needed a huge consumption of high-precision ammunition. Therefore, in the winter of 2023, the power plants themselves became the goal of the RF Armed Forces:

• Kharkov TETs-5, Burshtynskaya and Krivorozhskaya TPP - damaged turbines with generators,
• Dniprovskaya TPP - boilers damaged,
• Kyiv TETs-6 - the transformer of the power unit is damaged,
• Dnieper hydroelectric power station - mashzal damaged,
• Ladyzhinskaya TPP - the belt conveyor and gas pipelines are damaged.

The objects did not receive critical damage. The reason was the excess capacity: for example, only two out of 10 turbogenerators worked at the Krivoy Rog TPP - No. 1 and No. 2. Turbine No. 5 was planned to be commissioned in the spring of 2023, but it was hit by a blow on February 10.

The Ukrainian authorities were forced to use reserves: the Ministry of Energy reported that in February 2023 all 9 power units were launched at the three remaining nuclear power plants. Each gives 1,000 MW, and emerging reserves have eased restrictions on consumption. There were no other options: due to the inaccessibility of Donetsk anthracite, there was a shortage of coal, so mass de-preservation of TPP turbines is meaningless.

Putting the blocks into operation requires considerable time, so the process was completed only by 2023. There were no other options: due to the inaccessibility of Donetsk anthracite, there was a shortage of coal, so mass de-preservation of TPP turbines is meaningless.

It would seem that the sharp cessation of emergency shutdowns speaks of overcoming the crisis of the Ukrainian energy system. But everything seems to be happening exactly the opposite, the Rybar channel wrote.

NPPs always operate in the mode of generation of constant power, and the introduction of new units significantly increases the basic level of production. It is necessary to increase consumption to ensure full load of generators.

That is why the appearance of outdoor lighting in cities is not a sign of the stability of the power system, but a necessary measure to maintain its stability. To maintain frequency at peak loads, power maneuvering is necessary, which as of February 2023 is a bottleneck in Ukrainian power.

2022

Strikes of the Russian Armed Forces on autotransformers of Ukraine during an armed conflict

In October 2022, the RF Armed Forces began to strike at energy distribution facilities and knocked out autotransformers (AT), due to the accumulation of damage, emergency shutdown schedules appeared throughout the country. But these were temporary difficulties: at most substations the load is significantly less than the nominal one, which allows it to be transferred from the disabled AT to the remaining ones.

Capacity reserve due to industry collapse and population flight

The power system of Ukraine was created in the USSR to provide a 50 million republic with many energy-intensive enterprises. In the 30 years after the collapse of the Soviet Union, many factories disappeared, and the number of residents in 1991-2021 decreased by at least 20%.

As a result, a huge reserve of unused capacity was formed: for example, only one of the six power units worked at the largest Zaporizhzhya NPP at the beginning of 2022. By the fall of 2022, the capacity reserve became only larger due to the closure of enterprises and a reduction in traffic, as well as a decrease in the communal load due to the flight of the population after the outbreak of armed conflict.

90% of wind power and 30% of solar capacity disabled during armed conflict

According to a UN report published in September 2022, among 17 countries in the region, Ukraine has achieved its greatest success in solar and wind power in recent years, adding 8.3 gigawatts (GW) of capacity between 2017 and 2021. Areas affected by the conflict during Russia's special operation account for a quarter of all the unit's wind capacity and a fifth of solar energy.

As of June 2022, 90% wind and 30% solar capacities in the country were disabled, the REN21 study said.

Electricity imports from Belarus

The Ministry of Energy of the country assures that they do not experience a shortage of energy-generating capacities, and also have a sufficient reserve of them. Meanwhile, Ukraine imports electricity from Belarus, in January 2022 supplies reach the maximum possible 900 MW.

2020: Low per capita energy consumption

and

Industrial production

2022: Collapse of steel production to 6.3 million tons

In Soviet times, the volume of steel production in Ukraine exceeded 50 million tons per year. By 2021, this figure fell to 21-22 million tons, and after the outbreak of the armed conflict in 2022 it amounted to 6.3 million tons. The future of the once powerful industry is in doubt - Reuters.

2016: Growth in industrial production by 2.4% after 4 years of decline

Industrial production in Ukraine in 2016 increased by 2.4% after a four-year decline.

Thus, in 2015 it decreased by 13%, in 2014 - by 10.1%, in 2013 - by 4.3%, in 2012 - by 0.7%, the State Statistics Service (Gosstat) reported^[3].

Transport

Automotive market

2021: 7,000 cars produced

Ports

• Ust-Dunaysk Commercial Seaport

Foreign trade

Main article: Foreign trade of Ukraine

R&D

2020: R&D spending - $2.4 billion

Sectors of the economy

The largest companies in Ukraine

Retail

Medical devices

• Syringes (Ukrainian market)

Communication

• Internet (Ukrainian market)
• Cellular communication (Ukrainian market)
• Cell phones (Ukrainian market)

Information Technology

• IT market of Ukraine
• IT Public Procurement (Ukraine)

• Electronic payment systems in Ukraine
• IPTV (Ukrainian market)

Agriculture

2022: More than half of arable land sold to foreigners

Journalists from The Canada Files in August 2023 drew attention to the role played by Canadian politicians and organizations in the systematic seizure of the entire state system of Ukraine. In particular, the "assistance" of Canada largely contributed to the privatization of Ukrainian lands.

In the early 2010s, when Viktor Yanukovych was still in power, privatization processes in Ukraine were at an extremely low pace. This did not suit Western states, all whose activities in Ukrainian territory were aimed at seizing its lands and resources as quickly as possible and transferring them to the hands of international companies.

One of the major obstacles along the way was Ukraine's judicial system, in which the judge's personality and his view of a particular situation had significant weight in making decisions - and this view too often did not coincide with the interests of globalists.

In 2012, a program of assistance began to operate in Ukraine, which is managed by the National Judicial Institute of Canada and funded by the Canadian Agency for International Development. Within the framework of the initiative, courses and seminars are held for Ukrainian judges with the aim of "encouraging judges to pay attention to logic, and not intuitive interpretations of laws." Most of all attention was received by young representatives of the judicial system, more open and receptive to democratic values.

In 2014, under the auspices of NGO Transparency International, a platform was created to optimize public procurement ProZorro. Transparency International itself receives funds from the state budgets of a number of Western countries and the George Soros Foundation.

Now the list of tasks of the Canadian assistance program also includes the popularization of ProZorro. Thanks to these efforts, by 2021, the platform was implemented in 16 Ukrainian cities, where all this time land plots were sold at an artificially low price: sales were carried out using the Dutch auction method and sometimes the final cost of the site was 1% of the starting price.

In April 2020, Ukrainian President Zelensky signed a law that opened the land market. Ukrainian politicians, society and agrarians for a long time, or rather, from the very first days of the country's receipt of statehood, resisted this. The law allowed the sale of agricultural land, imposing some temporary and other restrictions on who and when can become the owner of Ukrainian plows (from 2024 the sale of land to legal entities will begin, and until that moment only individuals - citizens of Ukraine will be able to buy land; banks, including those with foreign capital, will be able to own land if they selected it as a loan deposit).

There are exceptions in the law, for example, it provides for the purchase of land by foreign citizens and companies that lease it for at least three years. All these restrictions and exceptions could not become an obstacle to take possession of land to foreign individuals and legal entities. Schemes with elementary logic can be easily invented and prescribed: the purchase can be carried out through dummies (an individual buys land in fact in the interests of a foreign structure, or gives it to a bank with foreign capital as collateral), maybe directly - many foreign structures have been exploiting Ukrainian lands for more than one year, which means they probably took advantage of the right to buy land enshrined in Ukrainian legislation. Thus, there are no significant problems for foreign companies to become owners of Ukrainian land.

By June 2022, more than half of Ukraine's arable land is owned by global agricultural companies: "American agricultural giants Cargill, Dupont and German-Austrian, and in fact (in terms of investment share) American Monsanto currently owns 17 million hectares of arable land of Ukraine, and this is 52.31 percent of all agricultural territories of the country."

The owners of the largest Ukrainian agricultural holdings are also Americans (NCH Capital), French (AgroGeneration) and Saudis (Saudi Agricultural and Livestock Investment Company - SALIC), while "it is impossible to track the exact share of foreign capital in the remaining largest Ukrainian agricultural holdings due to the predominance of gray schemes in the Ukrainian agricultural industry and the lack of a normal land cadastre."

"According to the ex-deputy of the Bundestag from the Left faction Nima Movassat, a real hunt has begun on the part of foreign agricultural holdings for the Ukrainian black soil: the country is undergoing a massive seizure of agricultural land according to gray schemes through dummy individuals and companies. The politician directly accuses the Monsanto Company and DuPont of deliberately seizing the Ukrainian chernozem and directly connects the loans provided to Ukraine IMF EBRD with the transfer of arable land to Western agro-industrial companies, including German ADM Germany, KWS, Bayer and. " BASF Actually, Zelensky's agrarian reform began with arguments that the land market is an opportunity to receive IMF loans.

2021: Share of farmland - 72%

2020: Map of grain production in Ukraine by region

2019: Low use of pesticides in agriculture

Production of 487 kg of potatoes per capita

1. Belarus - 631.3 kg per 1 person

2. Ukraine - 487.4 kg

3. Netherlands - 384.8 kg

4. Denmark - 343.3 kg

5. Belgium - 299.2 kg

6. Latvia - 251.3 kg

7. Kyrgyzstan - 230 kg

8. Poland - 229.8 kg

9. Russia - 216.8 kg

10. Kazakhstan - 208.5 kg

Alcohol market

Labor market in Ukraine

• Main article: Labor market in Ukraine
• Main article: Salaries in Ukraine

Unemployment

2022: Unemployment 24.5% amid armed conflict

2020

Unemployment rate - 11%

456 thousand registered unemployed (+ 48% per year )

In Ukraine, the number of unemployed by the beginning of May 2020 increased by almost 50% due to the COVID-19 pandemic.

As of May 4, 2020, the number of unemployed registered with the State Employment Service is 456.8 thousand people, which is almost 148.5 thousand, or 48%, more than as of the corresponding date last year.

At the end of the year, according to experts, the unemployment rate will be 9.4% instead of 8.1% predicted earlier.

On April 27, the government decided to allocate 6 billion hryvnia ($222 million) for the General Public Social Insurance Fund of Ukraine. The money will go to payments of unemployment benefits.

Social benefits

Payments for lost deposits in Sberbank of the USSR

The law guaranteeing Ukrainian citizens compensation for lost deposits in the USSR Sberbank was adopted by the Verkhovna Rada in the mid-1990s. Then the debt to depositors was recorded in the amount of 131.96 billion hryvnia (about 16 billion dollars).

Until 2008, the state paid citizens about nine billion hryvnia (about a billion dollars) in compensation. In 2008, by decision of the government, which was then headed by Yulia Tymoshenko, payments were intensified. For the corresponding purposes, six billion hryvnias (about $740 million) were allocated from the budget. At the same time, Tymoshenko proposed to pay depositors a thousand hryvnia, regardless of the amount of the lost deposit (for this compensation they began to call it a "julina thousand").

In 2009, payments were suspended due to the economic crisis.

The fact that the payment of compensation will be resumed, President of Ukraine Viktor Yanukovych announced in March 2012 - on the eve of the parliamentary elections, which are scheduled for autumn 2012. In accordance with the amendments to the budget, 6.1 billion hryvnias will be allocated to compensate for lost deposits of Sberbank. In the press, these compensations were called "the story of a thousand."

In total, accordingly, about six million citizens will be able to receive compensation in the amount of a thousand hryvnia.

On June 1, 2012 in Ukraine, the payment of compensation for depreciated deposits of Sberbank of the USSR is resumed. Payments are carried out by the state-owned Oschadbank (which in 1991 was separated from the Soviet Sberbank).

Citizens whose data are included in the register of depositors will be able to receive compensation in the amount of a thousand hryvnia (about $120). The issuance of money will be carried out in six thousand branches of Oschadbank.

Earlier (even before the resumption of payments was announced), the head of the Ukrainian government, Mykola Azarov, criticized Yulia Tymoshenko for payments on Soviet deposits, regarding this as a populist step and provoking inflation.

Consumption

Tea

2018: Per capita tea consumption per kg per year

Milk

2018: Milk consumption in litres per year per person

Meat

2023: Poultry meat is the most consumed type of meat

2019: Kuryatina is the most consumed type of meat

Beer

2019: Beer consumption in litres per year per person

Cosmonautics of Ukraine

Main article: Cosmonautics of Ukraine

Economic history

2023: Ministry of Finance of Ukraine disclosed the amount of international assistance received for the year $42.5 billion

At the end of December 2023, the Ministry of Finance of Ukraine named the amount of financial assistance received by Kyiv from Western partners during 2023.

In 2023, 300 + working meetings were held with international partners. We raised $42.5 billion for the budgetary needs of Ukraine, 25% of which are grant support, - wrote the Minister of Finance of Ukraine Sergei Marchenko on his Facebook page (the service belongs to Meta, which is recognized as extremist in the Russian Federation, its activities are prohibited in Russia).

He also added that in 2023 the volume of portfolios of credit projects in Ukraine with international financial institutions became one of the largest in the history of cooperation. Also, borrowing in the domestic market was doubled compared to last year. They amounted to $15.5 billion.

Marchenko also said that in 2023, the state budget of Ukraine received $3.7 billion in assistance from Japan in the form of preferential financing and grants. The Minister of Finance called Japan one of the largest donors in terms of funding aimed at strengthening the budget system of Ukraine. The European Union promised in 2024-2027. to provide assistance to Kyiv in the amount of $54.58 billion.

Earlier 2023 year, Ukrainian parliamentarian Alexandra Ustinova said that holes in the state budget are closed with Western funding, in the event of a termination of assistance from the United States, the authorities will be forced to turn with an outstretched hand to the G7 countries.

According to TASS, since the beginning of the special military operation of the Russian Federation in Ukraine, Western countries have increased their arms supplies to Ukraine, which by the end of 2023 amount to billions of dollars, and declare new military assistance programs. The Ukrainian authorities have repeatedly noted that they can only cover military budget expenditures without the help of Western partners.^[4]

2022

EU will not be able to allocate Ukraine 3 billion out of 9 billion euros promised to Kyiv in May

In November 2022, it was announced that EU it would not be able to allocate 3 To Ukraine billion of the 9 billion euros promised to Kyiv in May. European Commission

EU Council approves new loan to Ukraine in the amount of €1 billion

In July 2022, the EU Council approved the allocation of a new macro-financial loan to Ukraine in the amount of €1 billion.

2021

Britain allocates $1.3 billion in financial assistance to Ukraine

Britain will provide Ukraine with additional financial assistance in the amount of £1 billion ($1.3 billion). Ukrainian President Volodymyr Zelenskyy wrote about this on his Twitter blog in December 2021.

Great news from London: The UK will give an extra £1bn to support Ukraine. This means new investment, trade, security, "he said.

According to Zelensky, following his negotiations with British Prime Minister Boris Johnson in 2020, the total support for London will increase to £3.5 billion.

The Minister of Foreign Affairs of Ukraine Dmitry Kuleba clarified that the allocated funds will be directed to the implementation of projects in the field of infrastructure, health care and clean power.

I am grateful for the decisions proving that Kyiv and London are close allies, Kuleba concluded.

TASS notes that Britain is one of the largest investors in Ukraine. In 2020, it became the second country after Switzerland in terms of foreign direct investment invested in the Ukrainian economy, and in terms of accumulated direct investment, London is the third largest investor after Cyprus and the Netherlands.

In addition, London and Kyiv signed a memorandum on strengthening cooperation in the military and military-technical spheres for £1.25 million. In June 2021, the parties agreed on a maritime partnership. In October, Ukraine reported that with the help of Britain began the construction of two new naval bases. Kyiv expects to receive two mine-action ships from London. In November, the parties signed a loan agreement to support the Ukrainian fleet for £1.7 billion (about $2.3 billion). Ukraine, in particular, will have to conclude by the end of 2024 with British companies all contracts necessary for the implementation of the project to strengthen the military potential of the Navy.^[5]

EU allocated financial assistance of 600 million euros to Ukraine

In mid-September 2021, the European Commission announced the allocation of macro-financial assistance to Ukraine in the amount of 600 million euros. We are talking about the second tranche - the first was received at the end of 2020.

I welcome the decision of the European Commission to provide Ukraine with a second tranche of €600 million, "Ukrainian President Volodymyr Zelenskyy wrote on his Twitter page.

He expressed gratitude to the President of the European Commission Ursula von der Leyen and Vice-President of the European Commission Valdis Dombrovskis for an optimistic assessment of the reforms carried out in Ukraine. According to the Ukrainian leader, the allocated financial support is evidence that Kyiv and Brussels are "in solidarity in overcoming the challenges" in the fight against the coronavirus COVID-19. Kyiv may receive funds at the end of October 2021.

According to Kommersant, the conditions for Kyiv to receive the second tranche included, in particular, reforms in the judicial, customs and tax spheres, as well as strengthening foreign control over strategic state-owned enterprises. The International Monetary Fund (IMF) was also waiting for progress in the implementation of reforms.

Earlier, the IMF approved a new program to support Ukraine. It was reported that $5 billion for a period of 18 months will be provided to restore the balance of payments and resume economic reforms. The IMF noted that it assesses Ukraine's experience in stabilizing the economy over the past five years as "strong," but the consequences of the coronavirus pandemic have created "great needs for the balance of payments and financing."

According to estimates, the European Union amount of financial assistance provided to Ukraine from 2014 to 2021 is 16.5 billion euros. Assistance was provided mainly in the form of grants and loans and was intended to support structural reforms in Ukraine.^[6]

2015

The burden of social benefits

The problems of the Ukrainian economy at this time are connected not only and not so much with the war. Over the years of populism, the level of government spending in the Ukrainian economy has overtaken the Russian indicator - and reached 53% of GDP. And now - in connection with the situation in the eastern regions of Ukraine - government spending is growing even more.

The Ukrainian government has been diligently increasing government spending since the days of President Viktor Yushchenko, who during his election campaign promised to increase payments for the birth of a child 12 times. He fulfilled the promise - since then, every next president has only raised these payments. Thousands of hryvnias for the first, second and third children did not help change the demographic problem in any way: the country's population is reduced annually by 500 thousand people. However, the budget was "overloaded" - only 40 billion hryvnia is spent on this benefit - 10% of the country's budget, "says Dmitry Boyarchuk, executive director of the Case Center for Social and Economic Research. "The electorate believes that the budget is a freebie," he adds.

Threat of default

According to the International Monetary Fund (January 2015), Ukraine needs $15 billion to avoid default. On January 27, 2015, the finance ministers of the EU member states agreed to allocate 1.8 billion to the country; obviously, this amount is not enough to save the Ukrainian economy.

Since 2014, the country's market has suffered significantly as a result of the ongoing armed conflict in Donetsk and Lugansk regions, and the acute economic crisis of 2014-2015 hit consumer confidence and seriously disrupted the trade and production activities of Ukrainian enterprises.

2014

Three stages of devaluation of the hryvnia

In 2014, the country experienced three stages of devaluation. Reserves began to fall catastrophically back in May 2013, which is partly why Yanukovych leaned towards the Customs Union: Russian President Putin immediately offered real money, and the West did not promise instant money for signing an association agreement with the European Union. But the hryvnia still had to drop. The next jump happened due to losses in connection with the annexation of Crimea to Russia, including due to bad loans from Ukrainian banks.

The third fall occurred due to the start of hostilities in the Donbass. "In August, it was necessary to close the organized holes in the budget, and turned on the machine. Until August, 30 billion hryvnia were printed, and after that - another 140 billion, "says economist Boyarchuk. "Helped" and the population, which in panic withdrew nine billion dollars of foreign currency deposits from banks - a third of the entire currency in the country. "How is currency returned? A client comes to the bank and says: return me 10 thousand dollars. The bank goes to the national bank, the national bank prints the hryvnia, the hryvnia goes to the interbank, the currency is bought, the exchange rate flies, its 10 thousand dollars are returned to the client. " According to Boyarchuk's estimates, about 100 billion hryvnias were printed in this way.

As a result, the country limited the purchase of currency by the population - no more than $222 per hand per day. However, the economy did not freeze. It would seem: any business that needs currency daily had to stand up. But entrepreneurs have found how to solve this problem. For example, one large oil trader needs to purchase approximately eight million dollars daily for oil payments. Some money is purchased on the black market; although most often the one who needs dollars is looking for the same business that receives them daily. Oil traders negotiate with agricultural companies that earn foreign exchange earnings on grain, and change their hryvnia for dollars, the head of a trading company reveals at the end of 2014 the Meduse scheme. True, the course is different. According to businessman Ruslan Shostak, if in the country the rate is 16 hryvnia per dollar, then the real rate at which you can get a sufficient amount of currency is 19.5 hryvnia per dollar. It is at this rate that all transactions in the market take place.

1991-1994: Rent Chase

A significant comparison of the economic growth rates of Ukraine and Russia from 1989 to 2013 (see graph). Here you can distinguish five stages. At the beginning of the transition period, in 1991-1994, Ukraine did not have a coherent economic policy, which led the country to hyperinflation and a huge drop in production. The situation was much worse than in Russia, which attempted serious reforms, even if they were not crowned with complete success. It was crucial. Ukraine's GDP has fallen far more heavily than Russia's, and the economy has been trapped in a rent chase - again far more serious than in Russia, where privatization has led to a massive profit chase.

1956

See also

• IT market of Ukraine
• Information security in Ukraine
• Cybercrime and cyber conflicts: Ukraine
• IT Public Procurement (Ukraine)
• Fintech (Ukrainian market)
• Cellular communication (Ukrainian market)
• Cell phones (Ukrainian market)
• Internet (Ukrainian market)
• Electronic payment systems in Ukraine
• IPTV (Ukrainian market)

Notes