On Feb. 4, the National Bank of Ukraine reported a balance of payments surplus of $2.2 billion for 2013. The existence of a surplus is one of the few bright signs for the Ukrainian economy, especially after the bank posted a deficit of $4.2 billion in 2012.
However, this is not a sign of the Ukrainian
economy becoming healthier. The country had no growth in 2013, staving off a recession partly because of a vibrant agricultural sector.
Financial experts says that the balance of payments surplus is an illusory set of circumstances and accounting. The nation’s finances found some stability in the last month with Russia’s $3 billion purchase of Ukrainian debt. But Russian President Vladimir Putin has frozen the other $12 billion in bailout money, pending formation of a new Ukrainian government to its liking.
Another factor behind the illusory surplus is the continued failure of
Ukraine’s oil and gas monopoly Naftogaz to make payments
to Russia for imported natural gas. According to Dragon Capital Financial
Services, Ukraine’s outstanding debt for gas
imports is currently $2.7 billion.
Besides, Ukrainian companies borrowed only $1.92 billion in 2013,
while in 2012 the amount of their borrowings reached $6.63 billion. “The political
crisis decreased lending to business,” Vitaliy
Vavryshchuk, SP Advisors’ head of analytical department, told
Kommersant-Ukraine.
In fact, the real balance of payments deficit could be close to what it
was in 2012. Without receiving Russian financial help and after paying for Russian gas, Ukraine would have cash outflow reaching $3.8 billion in
2013.
However, all the official macroeconomic figures on country’s
economic performance in 2013 released by the Ukrainian government may be revised
during the year — most likely downward.
Moreover, the non-transparency of the National Bank of Ukraine’s policy,
actions and data processing has been the target of longstanding criticism. Sometimes even information on the exchange rate that the regulator provides the hryvnia to interbank market participants comes from anonymous sources.
Optimistic to the point of unrealistic macroeconomic figures will not improve the country’s business climate or stimulate industry. Given Ukraine’s dire financial state, last year’s balance of payments surplus looks like a fleeting piece of bad news.
Jennifer Carroll is a contributor to the Kyiv Post.
