The Ukrainian parliament has passed amendments to the 2020 budget. Overall, the budget’s revenue plan has decreased by $4 billion, as gross domestic product is estimated to fall by 3.9%. Within the amended budget, the parliament has created a special $2.4-billion fund to tackle the COVID-19 pandemic. The amended budget will also allocate an additional $600 million to the National Health Service to buy medications for those infected with COVID-19. It will also increase the pension fund by $1.1 billion, bringing it to $7 billion in total.
Meanwhile, the ICU investment group predicts Ukraine’s gross domestic product will fall by 6-8% in 2020, not by the 3.9% indicated in the new budget. “We expect that the economic downturn in Ukraine will have a U-shape with a slow recovery in the second half of the year, as the possible gradual lifting of quarantine restrictions will also be accompanied by very cautious consumer behavior and low business confidence,” the group stated in its macro review. Its analysts also said that, due to the uncertainty of the situation with the pandemic, the forecast may worsen.
The pandemic has forced 36,000 Ukrainians out of their jobs in one week. An average of 7,000 citizens were registered as unemployed each day during the last full working week, April 6–10, according to the State Employment Service. 388,000 out of 25.3 million working-age Ukrainians are now without a job, 22% higher than during the same period in 2019. The most critical situation has been registered in five Ukrainian oblasts – Lviv, Kharkiv, Dnipropetrovsk, Poltava and Zaporizhia.
There are no conditions for restructuring Ukraine’s national debt today, Finance Minister Serhiy Marchenko said. The country’s debt has reached $73 billion. “We are well aware of what is happening now. The negotiations with the International Monetary Fund are in a final stage, we expect credit support from the World Bank, the European Commission,” he stated on the Ukraina television channel’s talk show “Svoboda Slova with Savik Shuster.”
Ukraine cuts ferroalloy exports by 16.4% in three months. Ferroalloy enterprises of Ukraine reduced the export of ferroalloys to 200,000 tons. According to the State Customs Service, in monetary terms, the export of ferroalloys decreased by 21%, to $207 million. The largest portion of exports were provided to the Netherlands (29% of supplies in monetary terms), Turkey (15%) and Italy (12%). Imports have decreased too — by 20% to 12,000 tons worth $29 million.
Ukraine has also reduced coal and anthracite imports by 16.6% over the last three months. They decreased by 870,000 tons compared to the same period in 2019. For the imported coal, Ukraine has paid $472 million, which is 36% less than in January-March 2019, when it paid $740 million. Ukraine’s biggest sources of coal are Russia ($308.8 million and a 65% share of imports) and the United States ($119.927 million and a 25% share.)
Ukrainian hoteliers predict a late start of this year’s summer season. “Few people want to open summer hotels and beaches before July. The work of restaurants and entertainment centers will also depend on this. Events such as the Odesa Film Festival or concerts in the summer are unlikely to take place. Given the need to keep the pandemic from spreading, the start of the season in June is unlikely,” Olena Kalynovska, managing director of the five-star Kadorr Hotel Resort & Spa (Odesa), said.
Ukraine’s association of banks has received a $41,000 grant from USAID to study private lending markets and small- and medium-sized enterprises. The Independent Association of Banks of Ukraine (IABU) will conduct a study that plans to identify obstacles to the introduction of new financial instruments and provide recommendations on how to overcome them. IABU will analyze current banking products, lending practices, credit risks and the legislative field.
