This is a curated list of the biggest economical news from Ukraine in the past week.
Again, Ukraine has been dominated by news about the corona virus that is currently filling up not just news sites but hospitals and morgues as well. Just to take the past day as an example, Ukraine registered a record breaking high number of new cases. 26,870 people got registered with the disease and more than 600 people died.
Not surprisingly, the Health Minister Victor Lyashko expressed his concern in a lengthy interview. 70 percent of the population needs to be vaccinated, but right now only around 20 percent of Ukrainians have received the jab. Still, Lyashko said, it is moving in the right direction with the process.
“Now we have reached completely different numbers of vaccinations; on October 22, we had the fifth day in a row a daily record for the number of vaccinations. We did 289,000 vaccinations a day – we used to do that much in a month,” he said before arguing that it all depends on how many people are ready to be vaccinated.
“Even if you mathematically multiply 250,000 vaccinations by 70 days, if this trend continues, your question will be answered. This is provided that we will have so many people willing to get vaccinated every day. So, we need to create conditions for their number to be one or more,” said Lyashko.
More and more regions are entering the red zone, a quarantine measurement under the adaptive quarantine system. Kyiv is to enter the red zone on November 1, which means that cinemas, theatres, malls, non-food stores, gyms and cultural institutions will be closed unless all staff are fully vaccinated.
Public transportation will continue operating, but only people with negative PCR tests or vaccination certificates will be allowed to use the services. For cafés and restaurants to keep open, both staff and costumers must be fully vaccinated.
It is uncertain how zealous the authorities will be in upholding these regulations, and it remains to be seen if entering the red zone will actually change anything in the day to day lives.
In addition to that, because of the new wave of corona, Ukraine has also updated their entry requirements for both Ukrainians and foreigners. If you are vaccinated and travelling to Ukraine, you will need to show an insurance in the airport and the vaccination certificate.
NBU downgrades economic growth
The forecasted economic growth in Ukraine has been downgraded from 3.8 percent to 3.1 percent by the National Bank of Ukraine. The downgrade happens because of the pandemic and the rising gas prices, the bank said.
“The impact of the pandemic was longer and more significant (than predicted). This, together with the consequences of the sharp rise in gas prices, led to weaker results in Ukraine’s economy,” said Kyrylo Shevchenko, the governor of NBU.
NBU has also revisited their forecasts for the coming years as well. The GDP growth projection for 2022 has been lowered a bit from 4 percent to 3.8 percent. Growth in 2023 is expected at 4 percent.
The Ukrainian government owns several banks, which account for more than half of all banking assets in Ukraine. By 2025, the Ukrainian government wants to bring that number down to 25 percent through privatization. The government is currently working on privatizing of the state-owned Oschadbank, which could be the first of many.
Recently, The European Bank for Reconstruction and Development (EBRD) met with representatives of the bank to develop a strategy to reduce the state’s ownership from the current 60 percent to 25 percent by 2025. Among other things, EBRD and Oschadbank will work on improving corporate governance and attracting investors.
“The mandate letter paves the way for further cooperation with the EBRD within the implementation of Oschad’s strategy recently approved by the Cabinet of Ministers. We express our deep gratitude to our strategic partner, which once more proved its intention to support Oschadbank on its way to greater efficiency and privatization,” said Serhii Naumov, CEO of Oschadbank, according to a press release from EBRD.
To infinity and beyond!
The income for IT companies has skyrocketed. Again. The average income of Ukrainian IT companies working with foreign clients increased by 29 percent from the first half of 2020 to the first half of 2021. The sector has been growing in double digits for years, and with a new legal framework Diia City, it is expected to grow even further. And it is not just in the conventional IT sector.
Ukraine is one of the biggest markets for the use of cryptocurrencies such as Bitcoin globally, and the country recently decided to regulate the market to make it even more integrated into society and control its use. The new law is by many seen as a win for cryptocurrencies, but it doesn’t mean that crypto can be used for paying for goods and services in Ukraine at this point. It only makes it legal for Ukrainian citizens to trade.
Oleksandr Bornyakov, the deputy minister of Digital Transformation of Ukraine, recently wrote in Fortune that more regulation is underway.
“To boost the new digital economy, we are also building a top jurisdiction for crypto and blockchain companies. Last month, Ukraine took one more important step by granting legal status to virtual assets,” he pointed out, “The virtual assets market in Ukraine has a significant turnover, even on a global scale, but most of it is concentrated in a gray area. This creates potential risks for all players: the state, businesses, and users.
Threats to farms
Climate change is becoming a threat to the Ukrainian agriculture. That is the message from Jason Pellmar, the regional manager for Ukraine at International Finance Corporation (IFC). He says that climate change is a priority for IFC because of its threat to the agricultural sector.
“Now, because the climate is so much more in focus, we are seeing more innovations. Today, the global community is looking at much more than just energy resource conservation. Some examples include technological innovations, such as agritech, precision farming, and no-till or low-till agriculture,” Pellmar said.
“A wider adoption of climate-smart technologies, such as precision agriculture or better use of non-renewable resources, can reduce soil carbon loss and provide significant fuel savings that will directly reduce greenhouse gas emissions,” said Pellmar and added: “Moreover, using drones can help convey a clearer sense of the lay of the land and ensure better use of fertilizers and insecticides.”
In other news, the land reform has not exactly created the big momentum for investing in agriculture that the government had hoped for. In a survey,
According to the survey of the Ukrainian landowners, only 5.0 percent of farmers plan to sell their land shares over the next three years, while 2.8 percent are planning to sell within 3-5 years and 7.2 percent within 5-10 years. More than half – 55.0 percent – are not planning to sell their farmland at all, and 25.0 percent did not answer.
Mi casa es su casa
Despite being short on gas itself, Ukraine is ready to help out neighbouring Moldova with gas. Oleksiy Danilov, the head of the National Security and Defense Council in Ukraine, recently made headlines saying that Ukraine will help Moldova, struggling with the lack of gas and supplies.
Ukraine uses combat drone for the first time
Ukraine has used one of their Turkish made Bayraktar TB-2 strike drones for the first time in Donbas, where they bombed an artillery position. Germany condemned the use of drones in Donbas, and since then there has been large troop movements in both government controlled areas and the areas controlled by Russian backed separatists.
There has been an uptick in ceasefire violations ever since, spurring the fears of another escalation like the one we saw this spring.
Tourism is on
Though COVID-19 is again making Ukraine a less obvious destination for tourists, there are some signs that it might pick up soon. Ukraine and the EU signed the so-called Open Skies agreement earlier this month, making air traffic earlier between the two parties. The deal has been on the way for a long time, and it will cut the costs and administrative work for air travel between Ukraine and the EU as it removes the administrative barriers and unifies the airspace between the two parties.
Should you go to Kyiv for a visit, or if you are already here, Ukraine Nu revisited the Motherland statue, probably the most iconic structure in Kyiv. It weighs an enormous 560 tonnes, and she holds a 16-meter sword and a big shield, symbolizing the Soviet victory over Nazi Germany in WW2.
The female warrior statue stands on a plateau with a war museum inside with a section about WW2 and another about the current war in Donbas with Russian-backed separatists, which started in 2014 and has claimed more than 14,000 lives. It is a highly recommended site to visit.